Commercial banks are a principal provider of nonmortgage consumer credit.
However, not all banks focus their business so exclusively on this type of
lending, with some preferring to concentrate more on mortgage lending or business
loans. This exercise asks you to select six of the largest U.S. banks and
compare them with respect to the emphasis they place on consumer lending.
a. Visit the S&P's Market Insight database at mhhe.com/edumarketinsight
and look up the balance sheet of six of the nation's largest diversified banks.
(You will find the listing by clicking on the "Industry" tab and
searching under "GICS Sub-Ind. Constituents" for the GIC Sub-Ind.
Category, "Diversified Banks.")
b. From the most recent annual balance sheets (look under "Excel Analytics")
for each of the companies you have identified, determine what percentage of
total assets ("Assets Total") are represented by: (i) consumer loans;
(ii) mortgages; and (iii) commercial and industrial (business) loans.
c. From your results in part (b) order the banks from high to low in terms
of their reliance on consumer loans, mortgages, and commercial and industrial
loans. Is there a significant difference between the highest and the lowest
bank in each of the three categories? What does this suggest about specialization
in lending within the banking industry?
