What is "Offices of Bank Holding Companies" mean?

Question

Is anybody can explain the meaning of "Offices of Bank Holding Companies"?
Thank you.

Answer 1

http://www.census.gov/epcd/naics02/def/ND551111.HTM

Offices of Bank Holding Companies

This U.S. industry comprises legal entities known as bank holding companies primarily engaged in holding the securities of (or other equity interests in) companies and enterprises for the purpose of owning a controlling interest or influencing the management decisions of these firms. The holding companies in this industry do not administer, oversee, and manage other establishments of the company or enterprise whose securities they hold.

http://www.answers.com/topic/offices-of-bank-holding-companies?cat=biz-fin

ORGANIZATION AND STRUCTURE

Bank holding companies are essentially corporations whose assets are comprised of controlling shares of stock in one or more banks. The two principal types of companies are "one-bank" and "multibank" holding companies, which together encompass nearly all large banks. Although the majority of bank holding companies in the United States are classified as "one-bank" holding companies, most of these companies were organized to directly operate a bank, and are not, therefore, included in the bank holding company industry. The multibank corporations that make up the industry exercise varying degrees of control over the subsidiaries they own.

MBHCs earn money by increasing the scope, diversity, and efficiency of banks and bank branches. Banks and their branches, in turn, earn money by paying interest at rates lower than that charged on loans. Banks also generate revenue from such services as asset management, investment sales, and mortgage loan maintenance. Because of regulatory constraints, banks not associated with holding companies must operate under restrictions that often put them at a disadvantage compared to other financial institutions.

To overcome regulatory restraints, banks often use holding companies to circumvent legal restrictions and to raise capital by otherwise unavailable means. For instance, many banks can indirectly operate branches in other states by organizing their entity as a holding company. Banks are also able to enter and often effectively compete in related industries through holding company subsidiaries. In addition, holding companies are able to raise capital using methods that banks are restricted from practicing, such as issuing commercial paper.

Another important advantage that MBHCs have over individual banks is economies of scale. Many subsidiary banks benefit from operational efficiencies such as centralized and computerized bookkeeping, auditing, advertising, marketing, purchasing of supplies, research, personnel recruitment, group insurance and retirement programs, tax guidance, investment counseling, and other advisory services. In addition to greater access to capital, holding companies also facilitate mobility of money among their subsidiaries and allow them to spread gains and losses over all members of the holding corporation.

CURRENT CONDITIONS

In 2003, three holding companies dominated the industry: Citigroup, Inc., Bank of America, and J.P. Morgan Chase. These companies, and their lesser counterparts, were significantly affected by the repeal of the Glass-Steagall Act, which led to the acceleration of commercial and investment banking's commingled existence. The banks were highly interested in their new ability to leverage low-margin lending into the much more profitable fee-based businesses, such as underwriting shares. According to the Economist (U.S.), "For the most part, the industry leaders today are no longer banks, but financial-services companies. Their activities extend far beyond traditional commercial-banking tasks such as taking in savings and making loans. Many now engage in investment-banking activities such as underwriting bond and equity issues, advising on mergers and acquisitions and, crucially, selling on loans to other investors (by organising syndicates, buying credit derivatives that pay out in the event of a default or issuing securities bundling loans together)."

The plunge by U.S. banking institutions into investment-based services was not without pitfalls, with giants Citigroup and J.P. Morgan Chase both stumbling. In 2003 Citigroup announced charge-offs of more than $1 billion related to allegations of irregularities in the pricing of initial public offerings. J.P. Morgan Chase also reported a charge-off in excess of $1 billion related to the company's dealings with the bankruptcy of energy-giant Enron in late 2001. The bust of the dot-com industry also adversely affected the industry.

The general ill health of the U.S. economy darkened the skies for the banking industry in the early 2000s. A mild recession began in March 2001, but was catapulted into major economic worries by the terrorist attacks of September 11. According to the Federal Reserve, commercial and industrial loans dropped by 10 percent—$113 billion—between March 2001 and August 2002. The economic turndown led to job layoffs, stock market degradation, and a slew of bad debts. Many of the banking industry's adventures into investment services were, in hindsight, ill advised.

Despite weak economic conditions, the moribund stock exchange, and a long list of bankrupt clients, the banking industry still remained solid on the foundations of its deposit-taking and lending services. Margins were strong during 2002, with banks charging more for its loan services than the costs incurred to fund the loans. Earnings for 2002 were on pace to top a record $80 billion, with many banking companies posting double-digit gains.

INDUSTRY LEADERS

Citibank, a subsidiary of Citigroup—the world's second largest financial services institution (behind Japan's Mizuho Financial) and the first U.S. bank to surpass $1 trillion in assets—is itself the world's second largest consumer and corporate banking institution. Citbank has about 1,700 office in 40 countries, with approximately 700 located in the United States. In 2002, parent Citigroup reported a net income of $15.3 billion on revenues of $92.6 billion.

J.P. Morgan Chase, the nation's second largest banking system, is the result of a 2001 merger of Chase Manhattan, a retail banking powerhouse, and J.P. Morgan, an investment bank. J.P. Morgan Chase reported total assets of $712.5 billion in 2001. In 2002 the company reported a net income of $1.7 billion on $43.4 billion in revenues.

After a $43 billion merger in 1998, Bank of America Corporation (resulting from the combination of Bank-America and NationsBank) emerged as the industry leader. Bank of America was, as a result of the merger, situated in locations nationwide. The company included 11,500 branches in almost all of the 50 states and in 40 countries. In 2002 Bank of America had sales of $46.4 billion, resulting in a net income of $9.2 billion. Bank of America came in behind Citigroup and J.P. Morgan Chase with total assets of $619.9 trillion.

Answer 2

Did you deposit anything or set up any electronic future payments? The bank has reserved $30 in your account for some future activity that they expect (like a wire transfer) or you deposited a check and they have put a hold on some of the funds to make sure that the check clears before you can spend all the money.

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Answer 3

offices bank holding companies