Banks Find New Ways to Increase Profits
Spokesman-Review (Spokane, WA) (11/02/00) Vol. 140, No. 43 p.A12; Caldwell, Bert

Jay Tejera, a research analyst at Ragen MacKenzie, says that smart banks concentrate more on money management and less on lending to boost revenues. Tejera estimates that loan growth will be under 8 percent for the next three to five years, while wealth management will jump by 20 percent, and investment banking will increase by 15 percent. Large banks with over $10 billion in assets are making nearly half of total revenues from management fees, while community banks receive only 16 percent of revenues from such fees, according to Tejera. While bigger banks can offer a slew of products at lower prices due to competitive advantage, Tejera contends that community banks still have an advantage serving small businesses and households making between $30,000 per year and $50,000 per year, which are dependent on the trust services community banks offer.


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