Report on Aspects of the Contemporary Banking Sector - Risk and Essay

Report on Aspects of the Contemporary Banking Sector - Risk and Profitability Analysis - Essay subjectAccording to the Sunday Times, HSBCs commitment to sustainability has been recognized thus listed in the Best Green Companies key out (2010). RBS is a retail margeing institution under the RGS Group it provides bounding services including loans, deposits accounts and insurance. It is the largest bank in UK and the fourth largest bank globally. RBS is listed as the second best for customer satisfaction among the major high street banks. Barclays bank is other major bank having the largest ne 2rk of ATMs in the region. It is the first UK bank to give local business customers find to online banking services to check their supplier assign ratings as wholesome as the first bank to denote mass crush of contactless- enabled debit cards in the UK banking sector. The retail banking sector of Barclays offers loans, deposits accounts, insurance as well as Forex trading services for its customers. Lloyds TSB, a major banking network in the UK is a merger surrounded by Lloyds Bank and TSB thus forming superstar of the largest domestic banking forces in UK. The bank has over 3000 branches globally and are authoritative and regulated by the Financial Services Authority. Lloyds TSB retail banking services include credit cards, deposit accounts, credit cards, and loans. b. By using at least 4-5 years of financial data, identify, calculate and interpret key favourableness and risk ratios. Perform the analysis for each individual bank and then compare their performances and explain which bank has been the most effective in effectively managing profitability and exposure to risk. Modern banks focus on two important areas of revenue generation loan provision to customers for an interest rate and providing other services including specie transfer or exchange rates for a certain commission and other non-interest incomes and fees. This paper analyses the shareowners econ omic value creation using the four major banks Barclays plc, HSBC, Lloyds TSB and RBS within a 5 year period. In order to analyze the business practices and activities of the banks and how they influence shareholders note commercialise value, we use both the external and internal information including the auditors annual financial reports, stock market data, and designed control variables. By applying the traditional accounting ROA and ROE together with the innovative EVA methods to euphony each banks prospective performance, and regress it against the stock market returns and other control values, one can be able to understand their explanatory power more so with regards to individual shareholders economic value. The results obtained were both traditional and innovative accounting methods and they explain the variations of the stock returns for the four British banks. Over the half year decade, there are signs of revenue reduction in the major banking industries. Lloyds TSB tra des at a 4 per cent premium over the nurse value whereas RBS and Barclays trade at a discount to the book value of 32 per cent and 54 per cent, respectively. HSBC is the only UK rival trading at a premium to the book value. However, HSBC is physically diversified, and generates majority of its income outside Europe, more so in Asia. Since umpteen American and European banks have their balance sheets significantly overstuffed with intangible goodwill and assets, tangible book value is of more relevance for comparing against the individual banks market capitalizations. During the last half of 2008, market paroxysm