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Final Industry Analysis Paper

In the financial services sector that will greatly

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in the financial services sector that will greatly impact how each company will do business. Financial Services Revenue Return on Equity Return on Investment Earnings Per Share Market Capitalization Stock Price JP Morgan $110.9B 10.6% 4.3% $4.5 $169.7B $43.4 Bank of America $109.3B .63% 0.2% $.01 $102.3B $8.5 Citigroup $104.8B 6.4% 2.2% $3.6 $108.9B $36.5 Wells Fargo $88.3B 12.0% 6.0% $2.8 $180.6B $64.2 Goldman Sachs $36.8B 5.9% 1.8% $4.5 $64.2B $124.5 *B=Billion **Financials as of 4 th quarter 2011 ***Market Capitalization & Stock Price as of Monday April 2, 2012 Top Three Issues Facing Top Three Companies JP Morgan Problem Solution Lawsuits The company has been sued many times over the past couple of years for what seems to be unfair, unethical, and unlawful business practices The company needs to create a business manual stating what is acceptable business practice behavior, and what is unacceptable business practice behavior. By doing this, they will cut down on the lawsuits and the integrity of JP Morgan no longer suffers. In addition, they will no longer have to waste money on court fees and settlements. 23
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Credit Card Collections The government is probing JP Morgan for what they believe to be credit card fraud. The government has found discrepancies between the records of what borrowers owed and inaccurate record-keeping by outside law firms the company used to sue cardholders The company claims no wrongdoings in the upkeeps of their financial books. To prove this to the government, they should have an audit done to make sure that all of their credit card information is correct in case they are sued by the government Faltering Website As JP Morgan tried to update their website, the website went out of service on 17.3 million users. This is not the first time the website has failed after an upgrade. JP Morgan needs to hire a computer website expert to understand why the Internet site keeps failing, and what they can do to prevent it from happening again. Bank of America Problem Solution Loss of Market share Bank of America is set to lose much of it’s market share that it gained from the acquisition of Countrywide Banking & Home Loans Bank of America should give up corresponding lending. This will save the company money because these loans usually don’t provide high revenue. The Loss of $9 Billion In the second quarter of 2011, Bank of America lost $9 Billion from the mortgage security settlement. Bank of America needs to analyze where they can create cost cutting measures to save money. They should also invest in outside companies (international companies) to produce more revenue. Investors Not Trusting Banks With the many embezzlements, scams, and other greedy actions some banks have taken against their customers, the public is having a hard time with trust Show customers that they have nothing to fear by investing in Bank of America.
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