US AgBank Competition
Now Viewing US AgBank's competition in: Banks and Credit Unions (primary)
Recent Developments
Rising Defaults, Scarce Credit - Delinquency rates at commercial banks rose over 2 percentage points from the previous year to 4.6 percent in fourth quarter 2008, the highest rate since 1992. Commercial banks, which hold large amounts of commercial and residential mortgages, have been plagued with a rising number of mortgages over 30 days past due. As losses grow, banks may become even more reluctant to lend capital in favor of increasing reserves.
Bank Failures Reach Historic Highs - Twenty five FDIC-insured institutions failed in 2008, the largest number since 1993. The FDIC expects up to $65 billion in losses from bank failures over the next five years. The bad assets of a failed bank are stripped away and the bank's branches and deposits are sold to healthy banks. In time, the injection of capital into other banks may actually loosen paralyzed lending structures, stimulating business investment and consumer spending.
NYC Bank Robberies Spike - Bank robberies in New York City increased 57 percent in 2008 compared to the year before. Figures for 2009 are expected to rise even further, according to The New York Times. Banks that have cut back on security measures such as glass barriers at teller windows have been most vulnerable to crime. Bank robberies are also up in Albuquerque, Houston, and San Francisco. Industry experts recommend banks invest in explosive dye packs, construct counter tops that can trace fingerprints, and ban customers with hoods and sunglasses.
Competitive Landscape
Demand for banking services is closely tied to economic activity and the level of interest rates. The profitability of individual banks depends on marketing skills, efficient operations, and good risk management. Large economies of scale exist in some segments of the industry, which has encouraged industry consolidation. Smaller banks can compete successfully in segments where customer service or knowledge of the local market is more important. The industry is capital-intensive and highly automated: annual revenue per employee is close to $300,000.
Banks and Credit Unions Industry Forecast
from Hoover's/D&B subsidiary First Research
The output of US banks and credit unions is forecast to grow at an annual compounded rate of 1 percent between 2008 and 2013. Data Sourced: December 2008
Bank, Savings Institution, and Credit Union Growth Levels
First Research forecasts are based on INFORUM forecasts that are licensed from the Interindustry Economic Research Fund, Inc. (IERF) in College Park, MD. INFORUM's "interindustry-macro" approach to modeling the economy captures the links between industries and the aggregate economy.
First Research Industry Growth Rating
The First Research Industry Growth Rating reflects the expected industry growth relative to other industries, based on INFORUM's forecasted average annual growth for the combined years of 2009 and 2010.
- Demand: Depends on business transactions
- Need good risk assessment
- Risk: Slow economy cuts consumer/business volume
Industries Where US AgBank Competes
- Financial Services
- Lending
- Agricultural Lending (primary)
- Commercial Real Estate & Construction Lending
- Mortgage Banking & Related Services
- Lending