Company analysis of bank of america citigroup and morgan stanley - Essay Example

Company analysis Company analysis Bank of America Company profile Bank of America ltd. is an American international financial and banking service association, which is ranked second biggest bank holding organization within the United States by assets. It is the fourth biggest bank within the US by market capitalization. The institution is based in Charlotte North Carolina. Bank of America operates in over 160 states and has linkage with over 95% of the US Fortune 500 organizations and 80% of the Fortune Universal 500.

The firm is a participant of the federal deposit insurance corporation (FDIC) and an element of both the S&P 500 index as well as the Dow Jones Industrial means (Rosenbaum & Pearl, 2009). Industry profile By 2010, Bank of America was the fifth biggest firm within the US by total revenue alongside being the second biggest non-oil firm in US after Wal-Mart. The firm’s 2008 acquisition of Merrill Lynch boosted the Bank of America to be the global biggest wealth control organization with key players within the banking investment market.

As of August 2009, the firm possesses 13.1% of the entire bank deposits within the US and is among the four banks of US, together with JPMorgan Chase, Citigroup, and Wells Fargo as its primary competitors. From its banking options and different non-banking options, it offers a variety of banking and non-banking financial services and goods by six business sectors (Rosenbaum & Pearl, 2009). Recommendation The firm through its operation needs to keep consumer banking because it is the biggest sector within the company, and offers financial services to purchase enterprises within the US.

Since its crucial strategy is to be the leading bank across the domestic market, the firm must increase performance by investing more on acquisitions. Market penetration is still needed to be emphasized because of the increased banking institutions in the market that may threaten their competitive advantage (Rosenbaum & Pearl, 2009). Stock performance On September 2011, the firm sold Balboa Insurance Company and stopped to be a significant stockholder in Bow Energy Inc. whereas in November 24, 2011, it illustrated that the Bank of America Multilateral ceased to be a key stockholder with the firm.

Because of its market position, the company stocks are the most preferred by individuals as t keeps rising steadily making them viable stocks (Rosenbaum & Pearl, 2009). Citigroup Inc. Company profile Citigroup (Citi) is an American international financial services organization based in Manhattan, New York, US. The bank was initiated from one of the global biggest amalgamation in history through the joining of the banking leader Citicorp with the financial conglomerate Travelers Group. Citigroup has a global biggest financial services links, covering over 140 countries with nearly 20,000 offices across the world.

The firm presently hires more than 270,000 personnel throughout the world. It has more than 200 million client’s accounts in countries of operation. Citigroup used to be the biggest firm and bank across the world by total assets up to the emergence of the financial crisis of 2008. Currently, it is in position ten by size through a composite index. Citigroup experienced significant losses through the financial crisis of 2008, but was salvaged in November 2008 through some extensive packages by the US authorities.

Industry profile As per the New York Times, on February 23, 2009, the bank presented that US government may cover 35% equity stake within the firm through changing US$25 billion from emergency aid to ordinary shares by US Treasury credit of around $48 million to stop the bankruptcy of the biggest bank. Because of the spread domestic financial debt crisis alongside the European debt disaster, Citigroup had to cut over 5,000 jobs in 2011 across the world. The focus was to lower expenses within slumping gains.

In 2010, Citigroup obtained its initial profitable year from 2007. It presented $10.8 billion in net revenue, in relation to the $1.6 billion harm in 2009 (Rosenbaum & Pearl, 2009). Recommendation The firm should increase its regional client banking as it attracts a sizeable revenue from this sector. On the other hand, Citi Cards were responsible for over 42% gains with GCG. This indicates the biggest provider of credit cards throughout the world. Loan provisions is the other sector keeping the firm moving as it offer favorable rates to clients.

This, therefore, should be increased and additional market analysis carried out. Stock performance The company stocks, just like for the Bank of America enjoy an upper hand advantage due to its persistent overhaul performance within the industry. This has always ensured their stocks are liked and traded on a regular basis (Rosenbaum & Pearl, 2009). Morgan Stanley Company profile Morgan Stanley is an international financial service institution based in New York and addresses ten needs of a given varied groups, financial firms, governments, and private individuals.

It works in 45 countries, and has over 1400 offices with more than 60,000 workers. The firm presented US$290 billion in assets under the control or investigation. J.P. Morgan initiated the multilateral & Co. partners Harold Stanley, Henry S. Morgan, and others in 1935. In its initial year of operation, the firm worked with a 25% market in open provisions and individual placements (Rosenbaum & Pearl, 2009). Industry profile The firm set itself in the middle of the management crisis beginning in March 2005, which led to the loss of most of the company’s staff and eventually faced the laying off of the then CEO Philip Purcell within a span of three months after the crisis.

Recommendation Company shares need not to be sold, but rather hold back so that their value may rise. This strategy has kept other organizations moving. Stocks are the main source of income solutions for this firm and selling them at reduced price implies that the company will not obtain all its financial support. Stock performance Because h company has not penetrated the international market as the other banking institutions, its stock has been underperforming especially after the Great crisis of 2008.

On the other hand, since the company serves some given sectors, it implies that her stocks are not all open to the public, but the few individuals whose interests are served by the organization. Reference: Rosenbaum, J., and Pearl, J. (2009). Investment banking: valuation, leveraged buyouts, and mergers & acquisitions. New York, NY: John Wiley and Sons publishers.