As good as it gets

Article Abstract:

The banking industry continues to witness strong loan volumes and excellent credit quality halfway through 1997. However, chief credit officers and industry analysts caution banks against being complacent as they warn that banks are always affected when the economy slumps even as the worst credit hits often come from unexpected quarters. They believe that problems would likely arise from the consumer sector, which is now more vulnerable to rising rates due to the abundance of adjustable-rate mortgages, home-equity lines and credit cards. They also worry over pricing pressures and thin margins in national loan syndications, as well as the liberalization of underwriting terms. Despite these fears, banks' strong levels of capital and reserves, enhanced diversification and risk management techniques, and increased use of securitization are seen to arm them against financial downfall.

Industry Overview, Analysis, Bank loans

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Superstars or shooting stars?

Article Abstract:

The future of banking might very well be found in the Internet. Virtual, Internet-based banks are expanding exponentially in a trend that seems to imply that a powerful new force has entered the US banking landscape and may even represent a new business model for the industry. However, the ability of virtual banking firms to sustain their explosive growth is by no means assured. They may operate with lower cost structures compared to traditional banks and their transaction costs may be low but their marketing, technological and financing costs can be quite considerable. Virtual banks may do well in generating deposits but have been less successful in originating loans. Therefore, CEOs of large banks ought to consider all of the alternatives and potential issues of Internet-only banking before attempting to establish an Internet-based virtual bank.

Telegraph & other communications, Specialized Telecom Services, Wired Telecommunications Carriers, Economic aspects, Internet, Internet services, Cover Story, Electronic commerce, E-commerce, Online transaction processing, Virtual corporations

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Lifting the veil on tech spending

Article Abstract:

Wachovia Corp Executive VP and Chief Financial Officer Robert S. McCoy Jr. believes that banks should allow their business units to handle technology spending. Wachovia is allocating an estimated $200-300 million to technology infrastructure and discretionary strategic projects. The bank is relying on its business unit managers to conduct a major overview of strategic initiatives that are targeted for funding. This approach allows Wachovia to prioritize the allocation of technology budgets and avoid misspending. For McCoy, the critical element of success is the ability of banks to link technology to available resources. He also values the opinions of employees and customers in making technology-related investments. For him, evaluating the success of technology investments is subjective.

Interview, Science and technology policy, Wachovia Corp., WB, McCoy, Robert S., Jr.

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