Retail Lending in the United States

Industry Profile

Reference Code: 0072-2336 Publication date: December 2008

www.datamonitor.com
Datamonitor USA 245 Fifth Avenue 4th Floor New York, NY 10016 USA t: +1 212 686 7400 f: +1 212 686 2626 e: usinfo@datamonitor.com Datamonitor Europe Charles House 108-110 Finchley Road London NW3 5JJ United Kingdom t: +44 20 7675 7000 f: +44 20 7675 7500 e: eurinfo@datamonitor.com Datamonitor Germany Kastor & Pollux Platz der Einheit 1 60327 Frankfurt Deutschland t: +49 69 9754 4517 f: +49 69 9754 4900 e: deinfo@datamonitor.com Datamonitor Asia Pacific Level 46, 2 Park Street Sydney, NSW 2000 Australia

t: +61 2 8705 6900 f: +61 2 8705 6901 e: apinfo@datamonitor.com

ABOUT DATAMONITOR

ABOUT DATAMONITOR
Datamonitor is a leading business information company specializing in industry analysis. Through its proprietary databases and wealth of expertise, Datamonitor provides clients with unbiased expert analysis and in depth forecasts for six industry sectors: Healthcare, Technology, Automotive, Energy, Consumer Markets, and Financial Services. The company also advises clients on the impact that new technology and eCommerce will have on their businesses. Datamonitor maintains its headquarters in London, and regional offices in New York, Frankfurt, and Hong Kong. The company serves the worlds largest 5000 companies. Datamonitor's premium reports are based on primary research with industry panels and consumers. We gather information on market segmentation, market growth and pricing, competitors and products. Our experts then interpret this data to produce detailed forecasts and actionable recommendations, helping you create new business opportunities and ideas. Our series of company, industry and country profiles complements our premium products, providing top-level information on 10,000 companies, 2,500 industries and 50 countries. While they do not contain the highly detailed breakdowns found in premium reports, profiles give you the most important qualitative and quantitative summary information you need - including predictions and forecasts.

All Rights Reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher, Datamonitor plc. The facts of this report are believed to be correct at the time of publication but cannot be guaranteed. Please note that the findings, conclusions and recommendations that Datamonitor delivers will be based on information gathered in good faith from both primary and secondary sources, whose accuracy we are not always in a position to guarantee. As such Datamonitor can accept no liability whatever for actions taken based on any information that may subsequently prove to be incorrect. United States - Retail Lending Datamonitor (Published December 2008) Page 2

EXECUTIVE SUMMARY

EXECUTIVE SUMMARY
Market Value The United States retail lending market shrank by 4.4% in 2008 to reach a value of $12.516.7 billion. Market Value Forecast In 2013, the market is forecast to have a value of $14,929 billion, an increase of 19.3% since 2008. Market Segmentation I Mortgage lending is the largest category in the US market with 80.4% of revenues generated this way. Market Segmentation II The US generates 45.5% of revenues in the global market.

United States - Retail Lending Datamonitor (Published December 2008) Page 3

CONTENTS

TABLE OF CONTENTS

EXECUTIVE SUMMARY CHAPTER 1

1.1 1.2 1.3

3 7
7 7 8

Market Overview

Market Definition Research Highlights Market Analysis

CHAPTER 2 CHAPTER 3 CHAPTER 4 CHAPTER 5 CHAPTER 6

6.1 6.2 6.3 Citigroup Inc.

Market Value Market Segmentation I Market Segmentation II Competitive Landscape Leading Companies

9 10 11 12 15
15 18 22

Bank of America Corporation JP Morgan Chase & Co

CHAPTER 7
7.1

Market Forecasts

26
26

Market Value Forecast

CHAPTER 8

Macroeconomic Indicators

27

United States - Retail Lending Datamonitor (Published December 2008) Page 4

CONTENTS

CHAPTER 9
9.1 9.2 9.3 Methodology

Appendix

28
28 29 29

Industry Associations Related Datamonitor Research

United States - Retail Lending Datamonitor (Published December 2008) Page 5

CONTENTS

LIST OF TABLES
Table 1: Table 2: United States Retail Lending Market Value: $ billion, 2004-2008........................9 United States Retail Lending Market Segmentation I: % Share, by Value, 2008(e) .............................................................................................................10 United States Retail Lending Market Segmentation II: % Share, by Value, 2008(e) .............................................................................................................11 Key Facts: Citigroup Inc....................................................................................15 Key Financials: Citigroup Inc. ...........................................................................17 Key Facts: Bank of America Corporation ..........................................................18 Key Financials: Bank of America Corporation...................................................21 Key Facts: JP Morgan Chase & Co ..................................................................22 Key Financials: JP Morgan Chase & Co ...........................................................25 United States Retail Lending Market Value Forecast: $ billion, 2008-2013.......26 United States Size of Population (million) , 2004- 2008(e)................................27 United States GDP (Constant 2000 Prices, $ billion), 2004- 2008(e)................27 United States Inflation, 2004- 2008(e) ..............................................................27

Table 3:

Table 4: Table 5: Table 6: Table 7: Table 8: Table 9: Table 10: Table 11: Table 12: Table 13:

United States - Retail Lending Datamonitor (Published December 2008) Page 6

MARKET OVERVIEW

CHAPTER 1

MARKET OVERVIEW

1.1

Market Definition
This retail lending market profile covers the mortgage and consumer credit market. The market value reflects mortgage and consumer credit balances outstanding at the end of the year. At the time of preparation of this report, many financial markets were in a critical state due to the credit crunch, and it was difficult to predict how this would impact on retail lending. For this reason, all forecasts in this profile should be regarded as highly approximate. All currency conversions used in this profile were carried out at constant 2007 annual average exchange rates. For the purpose of this report the Americas comprises Brazil, Canada, Mexico and the US.

1.2

Research Highlights
The US retail lending market generated total revenues of $12,516.7 billion in 2008, representing a compound annual growth rate (CAGR) of 5.6% for the period spanning 2004-2008. The mortgage lending segment was the markets most lucrative in 2008, generating total revenues of $10,057.3 billion, equivalent to 80.4% of the market's overall value. The performance of the market is forecast to decelerate, with an anticipated CAGR of 3.6% for the five-year period 2008-2013, which is expected to drive the market to a value of $14,928.9 billion by the end of 2013.

United States - Retail Lending Datamonitor (Published December 2008) Page 7

MARKET OVERVIEW

1.3

Market Analysis
After a period of steady growth, the US retail lending market declined in 2008. Further declines are expected, however the market is forecast to recover and post steadily increasing growth rates towards 2013. The US retail lending market generated total revenues of $12,516.7 billion in 2008, representing a compound annual growth rate (CAGR) of 5.6% for the period spanning 2004-2008. In comparison, the European and Asia-Pacific markets grew with CAGRs of 6.3% and 5.3%, respectively, over the same period, to reach respective values of $9,557.3 billion and $4,078.9 billion in 2008. The mortgage lending segment was the markets most lucrative in 2008, generating total revenues of $10,057.3 billion, equivalent to 80.4% of the market's overall value. The consumer credit segment contributed revenues of $2,459.4 billion in 2008, equating to 19.6% of the market's aggregate revenues. The performance of the market is forecast to decelerate, with an anticipated CAGR of 3.6% for the five-year period 2008-2013, which is expected to drive the market to a value of $14,928.9 billion by the end of 2013. Comparatively, the European and AsiaPacific markets will grow with CAGRs of 3.6% and 2.8%, respectively, over the same period, to reach respective values of $11,411.7 billion and $4,684.4 billion in 2013.

United States - Retail Lending Datamonitor (Published December 2008) Page 8

MARKET VALUE

CHAPTER 2

MARKET VALUE

The United States retail lending market shrank by 4.4% in 2008 to reach a value of $12.516.7 billion. The compound annual growth rate of the market in the period 2004-2008 was 5.6%. Table 1: Year 2004 2005 2006 2007 2008 CAGR, 2004-2008:
Source: Datamonitor

United States Retail Lending Market Value: $ billion, 2004-2008 $ billion 10,064.8 11,189.6 12,291.2 13,097.0 12,516.7 % Growth

11.20% 9.80% 6.60% -4.40% 5.6%

DATAMONITOR

Figure 1:

United States Retail Lending Market Value: $ billion, 2004-2008

$ billion 14,000 12,000 10,000 $ billion 8,000 6,000 4,000 2,000 0 2004 2005 2006

% Growth 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% 2007 2008 % Growth

Source: Datamonitor

DATAMONITOR

United States - Retail Lending Datamonitor (Published December 2008) Page 9

MARKET SEGMENTATION I

CHAPTER 3

MARKET SEGMENTATION I

Mortgage lending is the largest category in the US market, generating 80.4% of the overall revenues. Consumer credits generate a further 19.6% of revenues. Table 2: United States Retail Lending Market Segmentation I: % Share, by Value, 2008(e) % Share 80.40% 19.60% 100.0%
DATAMONITOR

Category Mortgage Lending Consumer Credit Total

Source: Datamonitor

Figure 2:

United States Retail Lending Market Segmentation I: % Share, by Value, 2008(e)

Consumer Credit 19.6%

Mortgage Lending 80.4%

Source: Datamonitor

DATAMONITOR

United States - Retail Lending Datamonitor (Published December 2008) Page 10

MARKET SEGMENTATION II

CHAPTER 4

MARKET SEGMENTATION II

The US generates 45.5% of revenues in the global market. Europe accounts for a further 34.8% of the global market value. Table 3: United States Retail Lending Market Segmentation II: % Share, by Value, 2008(e) Geography United States Europe Asia-Pacific Rest of the World Total
Source: Datamonitor

% Share 45.50% 34.80% 14.80% 4.90% 100.0%

DATAMONITOR

Figure 3:

United States Retail Lending Market Segmentation II: % Share, by Value, 2008(e)

A sia-Pacif ic 14.8%

Rest of the World 4.9%

United States 45.5%

Europe 34.8%

Source: Datamonitor

DATAMONITOR

United States - Retail Lending Datamonitor (Published December 2008) Page 11

COMPETITIVE LANDSCAPE

CHAPTER 5

COMPETITIVE LANDSCAPE

For the purposes of this profile, the US retail lending market consists of consumer credit and mortgages, valued in terms of outstanding balances rather than interest and non-interest revenues obtained by credit providers. Individuals taking any form of credit or mortgage are considered as buyers. Banks, building societies, credit card companies and any others financials institutions that are involved in the credit and mortgage market are taken as players and information technology and communications systems companies as suppliers. The buyer power in this market is moderate as players are trying to regain their confidence in financial products. The effects of the economic downturn have not directly influenced the suppliers, whose services are essential for running the financial business. The threat of new entrants is bigger in the US where several major players ceased to exist, rather than in other countries where the well established institutions may post quite a substantial retaliation during recession. Alternative options to lending are growing as confidence in financial institutions weakens and individuals face uncertain times. Considering the fact that in retail lending the buyers are individual consumers, buyer power in this market is weakened. Losing one customer has a fairly marginal impact on a typical credit provider, although at the time of writing this report the lending institutions tend to devote their funds and time in order to keep the customer or tempt them offering better terms of the agreement once switched from other lenders. Switching costs may also significantly weaken buyer power. For example, switching mortgage provider may require the buyer to spend time on paperwork and impose additional fees, even though a new provider might offer a cheaper loan in the longer term. Changing credit card provider can appear to have low switching costs - in fact, the buyer may be offered 0% interest for a period or other inducements to switch - but there is growing awareness that moving from one credit card provider to another too frequently can reduce customer's credit rating, which constitutes significant switching costs. Means of differentiation in this market include a variety of loyalty schemes for credit cards, and the development of products such as the 'current account mortgage': a current (checking) account that includes a mortgage and the facility to secure other loans against the mortgaged real estate. Consumer loyalty is the major issue for lenders as the current, unpredictable situation in the lending market pushes customers to switch around in the hope of finding the best and the most secured funds provider. Overall, buyer power is assessed as moderate. In the US retail lending market, suppliers of information technology and communications systems have considerable power. It is important for lenders such as banks, building societies, and credit card companies to have ITC systems that can deal with large numbers of transactions rapidly and reliably. As identity theft becomes an increasing threat, lenders must offer continual upgrades to their security systems.

United States - Retail Lending Datamonitor (Published December 2008) Page 12

COMPETITIVE LANDSCAPE
Typical suppliers are large companies such as IBM, since relatively few suppliers have sufficient resources and experience to analyse the complex ICT needs of a major retail lender and implement a solution. Furthermore, although major financial institutions will maintain their own IT departments, there is little likelihood of significant backward integration, which further strengthens suppliers (although it is equally unlikely that suppliers would attempt to integrate forwards into financial services). Switching costs are high, since there are significant sunk costs associated with the commissioning of a particular ITC system (custom hardware, staff training, etc). Additional costs for major retail lenders such as banks and building societies include salaries, rents, and other overheads associated with their extensive high street branch networks. While many companies offering lending facilities are financial institutions that hold the assets themselves, others act purely as retailers. For example, store cards and private label credit cards are offered to end-users by a variety of companies and organisations. In these cases, the suppliers are the companies extending credit upstream, and again, these will generally have moderate supplier power relative to the retailers. Supplier power is assessed as moderate overall in this market. The US lending market is estimated to post quite healthy growth rates after 2010 which may encourage new entrants to emerge at this time. However, in the current economic climate lending has dropped and the housing market is facing decline, which offers an uncertain prospect for potential new entrants. The fact that customers confidence in established institutions has been recently impaired might push them towards new institutions with innovative (or just the opposite traditional) attitudes towards lending. However, entry to the market in the form of a fully-fledged bank or similar financial institution requires substantial amounts of capital, to establish a branch network and brand identity, and also to comply with the international strict capital adequacy requirements. However, it is possible to enter the market as an intermediary, offering consumers credit that is ultimately sourced by a third-party institution. This is an easier mode of entry. Overall, the likelihood of new entrants is assessed as moderate. The recent highly publicized crisis of various financial institutions along with the current economic climate and predictions of further downturn are strongly undermining the confidence in market players. The threat of recession and possible losses to loans banks is likely to inevitably result in the restriction of capital and lower willingness of consumers to borrow and, consequently, negatively affect the financial condition of banks and investors. Such a situation in the lending market may push consumers to look for alternatives. However, when considering, for example, the average price of property few realistic substitutes exist for mortgages. Rental seems to be the most suitable possibility, but over a typical lifetime may not be cheaper than purchase. Debit cards are a partial substitute for credit cards, offering the same advantages over cash (convenience, security, ability to carry out remote transaction such as online purchases), but of course do not offer credit facilities.

United States - Retail Lending Datamonitor (Published December 2008) Page 13

COMPETITIVE LANDSCAPE
Another substitute for retail lending is to delay purchases and use retail saving products, such as bonds, to build up sufficient funds, which is becoming even more popular at the time of the report writing. Generally, however, consumer credit has proved itself a very popular substitute for the more traditional approach. Overall the threat of the substitutes in the US retail lending market is moderate. The main primary sources of retail lending in the US (banks and similar financial institutions) are all fairly similar in service portfolios and business models, although players try to differentiate themselves by offering a wide range of lending services and competitive interest rates. The latest situation in the US lending market caused major players like Lehman, to withdraw from the stage, reducing significantly the number of the very strong players. However the biggest credit market in the world is on constant outlook for lending services and the prediction for the future is optimistic which may ease the present fierce rivalry in forthcoming years. The general downturn in the housing market may intensify competition going forward. However, the present lower demand for these services, caused by the general distrust mitigates the former. The, present decreasing global lending market, may cause the rivalry level to grow. All in all the rivalry level is assessed as strong.

United States - Retail Lending Datamonitor (Published December 2008) Page 14

LEADING COMPANIES

CHAPTER 6

LEADING COMPANIES

6.1

Citigroup Inc.
Table 4: Address: Telephone: Website: Financial Year-End:
Source: Company Website

Key Facts: Citigroup Inc. Citigroup Inc., 399 Park Avenue, New York, New York 10043, USA 1 212 559 1000 www.citigroup.com December
DATAMONITOR

Citigroup (or 'the group') is one of the most diversified financial services company in the world. The group's product portfolio includes retail banking, corporate banking, investment banking and asset management. The group has operations in 100 countries spanning North America, Latin America, Asia, Europe, the Middle East and Africa. Citigroup is headquartered in New York City, New York and employs about 374,000 people. Citigroup is a diversified global financial services holding company, It has more than 200 million customer accounts in over 100 countries. Citibank, a subsidiary, is Citigroup's arm in commercial banking. Citibank's principal offerings include consumer finance, mortgage lending, and retail banking products and services, investment banking, commercial banking, cash management, trade finance and ecommerce products and services, and private banking products and services. Citigroup operates in the following regions: North America, Latin America, Asia, Europe, the Middle East and Africa The company operates through five operating segments: global consumer group, markets and banking, global wealth management, alternative investments and corporate and other. Global consumer group provides an array of banking, lending, insurance and investment services. The segment's distribution network includes 8,527 branches, approximately 20,000 ATMs, and 530 automated lending machines (ALMs), the Internet, telephone and direct mail, and through independent representatives. Global consumer group is comprises the U.S. consumer and international consumer businesses. The U.S. consumer is composed of four businesses: cards, retail distribution, consumer lending and commercial business.

United States - Retail Lending Datamonitor (Published December 2008) Page 15

LEADING COMPANIES
Operating in fie geographies including Mexico, Latin America, EMEA, Japan, and Asia, international consumer sub segment is composed of three businesses: cards, consumer finance and retail banking. Markets and banking segment provides trading, investment banking, and commercial lending products and services to corporations, governments, institutions and investors in approximately 100 countries. Markets and banking has the following subsegments: securities and banking, transaction services and other.Securities and banking offer an array of investment banking services and products including advisory services, debt and equity trading, institutional brokerage, foreign exchange, structured products, derivatives, and lending. Transaction services include cash management, trade services, and securities and fund services (SFS). The global wealth management (GWS) division comprises three of brands: The Citi Private Bank, Smith Barney and Citi Investment Research. The CIti Private Bank provides personalized wealth management services for high-net-worth clients in around 33 countries and territories. These services include investment management, investment finance and banking services. Smith Barney provides investment advice, financial planning and brokerage services to affluent individuals, companies, and nonprofits organizations. Citi Investment Research covers more than 3,000 companies that represent 90% of the market capitalization of the major global indices. It also provides macro and quantitative analysis of global markets and sector trends. Alternative investments (AI) manage capital on behalf of Citigroup, as well as for third-party institutional and high-net-worth investors. AI is an integrated alternative investment platform that manages a range of products across five asset classes: private equity, hedge funds, real estate, structured products and managed futures. Alternative investments (AI) manage capital on behalf of Citigroup, as well as for third-party institutional and high-net-worth investors. AI is an integrated alternative investment platform that manages a range of products across five asset classes: private equity, hedge funds, real estate, structured products and managed futures

United States - Retail Lending Datamonitor (Published December 2008) Page 16

LEADING COMPANIES
Key Metrics Table 5:
Metric Revenues Net Income Profit Margin Total Assets Total Liabilities Employees

Key Financials: Citigroup Inc.

2003 71,594.0 17,853.0 24.9% 1,264,032.0 1,166,018.0 259,000 2004 2005 2006 2007 79,635.0 83,642.0 89,615.0 81,698.0 17,046.0 24,589.0 21,538.0 3,617.0 21.4% 29.4% 24.0% 4.4% 1,484,101.0 1,494,037.0 1,884,318.0 2,187,631.0 1,374,810.0 1,381,500.0 1,764,535.0 2,074,033.0 294,000 307,000 337,000 374,000

All in $ millions, except for employee numbers and margins Source: Company Filings

DATAMONITOR

Figure 1:

Revenues & Profitability: Citigroup Inc.

Revenues Net Income Profit Margin 35.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 2003 2004 2005 Year 2006 2007 Profit Margin (%) 30.0%

100,000 US$ Millions 80,000 60,000 40,000 20,000 0

Source: Company Filings

DATAMONITOR

United States - Retail Lending Datamonitor (Published December 2008) Page 17

LEADING COMPANIES

6.2

Bank of America Corporation

Table 6: Address: Key Facts: Bank of America Corporation Bank of America Corporation, Bank of America Corporate Center, 100 North Tryon Street, Charlotte, North Carolina 28255, USA 1 704 386 5681 www.bankofamerica.com December BAC New York
DATAMONITOR

Telephone: Website: Financial Year-End: Ticker: Stock Exchange:

Source: Company Website

Bank of America Corporation (BoA or 'the company') is one of the world's largest financial institutions. It serves individual consumers, small businesses and large corporations with a range of banking, investing, asset management and other financial products and services. The company primarily operates in the US, Latin America, Europe and Canada. BoA is headquartered in Charlotte, North Carolina and employs 210,000 people. BoA is a US based bank holding company. Through its banking and non-banking subsidiaries in the US and selected international markets, BoA provides a range of financial services and products. The company operated in more than 30 states in the US, the District of Columbia, and 44 foreign countries, in December 2006. In the US, BoA serves more than 55 million consumer and small business relationships with more than 5,700 retail banking offices, more than 17,000 automated teller machines (ATMs) and through the Internet. BoA generates revenue through four business segments: global consumer and small business banking, global corporate and investment banking, global wealth and investment management, and others. Global consumer and small business banking (GCSBB) serves approximately 53 million consumer households in addition to small businesses across the US. BoA's retail franchise covers 30 states in the US and the District of Columbia, representing around 76% of US residents. Within GCSBB there are four businesses: deposits, card services, mortgage and home equity. BoA's deposit products include traditional savings accounts, money market savings accounts, certificate of deposit (CDs), individual retirement account (IRAs), and regular and interest checking accounts. Debit card results are also included in deposits. In the fiscal year ended December 31, 2006, the company added approximately 2.4 million net new retail checking accounts and 1.2 million net new retail savings accounts.

United States - Retail Lending Datamonitor (Published December 2008) Page 18

LEADING COMPANIES
The card services sub division offers consumer and business cards, unsecured lending, merchant services and international card services. BoA offers a variety of cobranded and affinity credit card products. The mortgage business includes the origination, fulfillment, sale and servicing of first mortgage loan products. Servicing activities include collecting cash for principal, interest and escrow payments from borrowers, and accounting for and remitting principal and interest payments to investors, and escrow payments to third parties. In addition to the company's own distribution channels, mortgage products are sold through more than 6,500 mortgage brokers in 50 states of the US. As on December 31, 2006, the servicing portfolio of BoA was valued at $333 billion. Home equity generates revenue by providing a line of home equity products and services to customers nationwide. Home products are distributed through the company's retail network and through partnership with mortgage brokers. As on December 31, 2006, the home equity servicing portfolio was $86.5 billion. Global corporate and investment banking (GCIB) provides a range of financial services to clients ranging from companies with $2.5 million in revenues to large multinational corporations, governments, institutional investors and hedge funds. BoA's clients are supported through offices in 26 countries that are divided into four distinct geographic regions: US and Canada; Asia; Europe, Middle East, and Africa; and Latin America. GCIB products and services are delivered from three primary businesses: business lending, capital markets and advisory services, and treasury services. Business lending provides lending related products like commercial and corporate bank loans and commitment facilities to business banking clients, middle market commercial clients and large multinational corporate clients. Real estate lending products are issued to public and private developers, homebuilders and commercial real estate firms. Products also include indirect consumer loans offered through financing automotive, marine, motorcycle and recreational vehicle dealerships across the US. The capital markets and advisory services sub division provides products, advisory services and financing to institutional investor clients globally. BoA also provides debt and equity underwriting and distribution capabilities, merger related advisory services and risk management solutions. The treasury services sub division provides integrated working capital management and treasury solutions to clients worldwide through a network of proprietary offices and special clearing arrangements. Products and services include treasury management, trade finance, foreign exchange, short-term credit facilities and shortterm investing options.

United States - Retail Lending Datamonitor (Published December 2008) Page 19

LEADING COMPANIES
Global wealth and investment management provides customized banking and investment services customized to the wealth management goals of individual and institutional customers. The services are offered through three primary businesses: the private bank, Columbia Management (Columbia), and premier banking and investments (PB&I). In addition, the segment includes the impact of Banc of America Specialist and the results of asset liability management activities. The segment also includes the impact of transferring 'qualifying affluent customers' from 'global consumer and small business banking' to 'PB&I customer service model'. The private bank provides investment, trust and banking services, as well as specialty asset management services for oil and gas, real estate, farm and ranch, timberland, private businesses and tax advisory services. The private bank also provides integrated wealth management solutions to high-networth individuals and families with investable assets greater than $50 million through its Family Wealth Advisors unit. Columbia is an asset management business serving the needs of both institutional clients and individual customers. Columbia provides asset management services including mutual funds, liquidity strategies and separate accounts. Columbia mutual fund provides an array of investment strategies and products including equities, fixed income, and money market funds. Columbia distributes its products and services directly to institutional clients. The company reaches individual clients through the private bank, Family Wealth Advisors, premier banking and investments, and non-proprietary channels, including other brokerage firms. PB&I include Banc of America Investments, the company's full-service retail brokerage business and its premier banking channel. PB&I has a network of approximately 4,400 client advisors with a personal wealth profile that includes investable assets plus a mortgage that exceeds $500,000 or at least $100,000 of investable assets. Others includes BoA's equity investment businesses, the residual impact of the allowance for credit losses and from the cost allocation processes, merger and restructuring charges, inter segment eliminations, and the results of certain consumer finance and commercial lending businesses that are being liquidated. Others also includes certain amounts associated with asset liability management activities, hedges of interest rate and foreign exchange rate fluctuations, certain gains or losses on sale of whole mortgage loans, and gains or losses on sale of debt securities.

United States - Retail Lending Datamonitor (Published December 2008) Page 20

LEADING COMPANIES
Key Metrics Table 7:
Metric Revenues Net Income Profit Margin Total Assets Total Liabilities Employees

Key Financials: Bank of America Corporation

2003 37,834.0 10,762.0 28.4% 749,104.0 699,069.0 133,500 2004 2005 2006 2007 48,965.0 56,923.0 74,247.0 68,068.0 13,947.0 16,465.0 21,133.0 14,982.0 28.5% 28.9% 28.5% 22.0% 1,044,631.0 1,291,803.0 1,459,737.0 1,715,746.0 960,047.0 1,190,270.0 1,324,465.0 1,568,943.0 176,000 176,638 203,000 210,000

All in $ millions, except for employee numbers and margins Source: Company Filings

DATAMONITOR

Figure 2:

Revenues & Profitability: Bank of America Corporation

Revenues Net Income Profit Margin 35.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 2003 2004 2005 Year 2006 2007 Profit Margin (%) 30.0%

80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0

Source: Company Filings

US$ Millions

DATAMONITOR

United States - Retail Lending Datamonitor (Published December 2008) Page 21

LEADING COMPANIES

6.3

JP Morgan Chase & Co

Table 8: Key Facts: JP Morgan Chase & Co 270 Park Avenue, New York 10017 2070, New York, USA 1 212 270 6000 1 212 270 1648 www.jpmorganchase.com December JPM New York
DATAMONITOR

Address: Telephone: Fax: Website: Financial Year-End: Ticker: Stock Exchange:

Source: Company Website

JP Morgan Chase & Company (JPMC) provides investment banking, security services, asset management, hedge fund and retail banking services through its subsidiaries. The company primarily operates in US, Europe, the Middle East, Africa and the Middle East. It is headquartered in New York City, New York and employs 180,667 people. JPMorgan Chase & Company (JPMC) is a financial holding company. It is a leading global financial services firm and one of the largest banking institutions in the US. In 2007, JPMC recorded around $1.56 trillion in assets and $123.2 billion in stockholders' equity. The company is a leader in investment banking, financial transaction processing, asset management, and private equity. The company operates through the following brands: JPMorgan Chase, JPMorgan and Chase. JPMorgan Chase represents the parent company, which includes all of the firm's subsidiaries; it is also used by the treasury services business. The following businesses of JPMC use the JPMorgan brand: investment bank, worldwide securities services, private banking, asset management, one equity partners and private client services. The US consumer and commercial banking businesses serve customers under the Chase brand. JPMC's principal bank subsidiaries are JPMorgan Chase Bank, a national banking association in the US with branches in 17 states, and Chase Bank USA, a national bank that is the company's credit card issuing bank. JPMC's principal non-bank subsidiary is JP Morgan Securities, which is the company's US investment banking arm. Its operations are spread across more than 50 countries. The company operates through seven segments: investment bank, retail financial services, card services, asset management, treasury and securities services, commercial banking, and corporate.

United States - Retail Lending Datamonitor (Published December 2008) Page 22

LEADING COMPANIES
Investment bank JPMC operates in the investment banking sector through JPMorgan, a subsidiary. JPMorgan is one of the world's leading investment banks. The division advises on corporate strategy, capital raising in equity and debt markets, risk management, and market-making in cash securities and derivative instruments. Additionally, the division engages in deploying its own capital to proprietary investing and trading activities. Retail financial services The retail financial services division operates through four sub-divisions: home finance, consumer and small business banking, auto and education finance, and insurance. This division is engaged in the provision of products and services including deposits, investments, loans and insurance for consumers and small businesses. The home finance sub-division is a provider of consumer real estate loan products and is one of the largest originators and providers of home mortgages. The consumer and small business banking sub-division offers one of the largest branch networks in the US. This sub-division operates in seventeen states with 3,100 bank branches and 9,100 ATMs. Auto and education finance is the largest non-captive originator of automobile loans as well as a leading provider of loans for college students. Through its insurance operations, the company is engaged in selling and underwriting a range of financial protection products and investment alternatives. The insurance product portfolio includes life insurance, annuities and debt protection products. JPMC sold its insurance business in 2006. Card services The card services division is a leading issuer of credit cards in the US. It has more than 154 million cards in circulation and about $153 billion worth of managed loans. The card services division is the second-largest MasterCard/ Visa credit card issuer in the US. It offers a wide variety of general-purpose cards to meet the needs of individual consumers, small businesses and partner organizations. The partner organizations include AARP, Amazon, Continental Airlines, Marriott, Southwest Airlines, Sony, United Airlines and Walt Disney Company. The card division also issues private-label cards for Circuit City, Kohl's, Sears Canada and BP. Additionally, this division is the largest merchant acquirer in the US. Asset management The asset and wealth management division provides investment advisory and management services to institutions and individuals. Through this division, JPMC is a global leader in investment and wealth management.

United States - Retail Lending Datamonitor (Published December 2008) Page 23

LEADING COMPANIES
It provides global investment management in equities, fixed income, real estate, hedge funds, private equity and liquidity. The asset management operations deal in both money market instruments and bank deposits. It also provides trust and estate and banking services to high-net-worth clients, and retirement services to corporations and individuals. This division serves four distinct client companies through three businesses: institutions through JPMorgan Asset Management, ultra-high-net-worth clients through the private bank, high-net-worth clients through private client services, and retail clients through JPMorgan Asset Management. Treasury and security services The treasury and securities services division provides transaction, investment and information services that support the needs of institutional clients worldwide. JPMC is one of the world's largest cash management providers and a leading global custodian. This division operates through three sub-divisions: treasury services, investor services and institutional trust services. The treasury services business provides a variety of cash management products, trade finance and logistics solutions, wholesale card products, and short-term liquidity management tools. The investor services business provides custody, fund services, securities lending, and performance measurement and execution services. The institutional trust services sub-division provides trustee, depository and administrative services for debt and equity issuers. Corporate The corporate division comprises private equity, treasury, corporate staff units and expenses that are centrally managed. Private equity includes the JPMorgan Partners and ONE Equity Partners businesses. Treasury manages the structural interest rate risk and investment portfolio for JPMC. The corporate staff units include central technology and operations, internal audit, executive office, finance, human resources, marketing and communications, office of the general counsel, corporate real estate and general services, risk management, and strategy and development. Other centrally managed expenses include the firm's occupancy and pension-related expenses, net of allocations to the business. Commercial banking The commercial banking division serves more than 30,000 clients including corporations, municipalities, financial institutions and not-for-profit entities. Commercial banking offers industry knowledge, experience, a dedicated service model, and local expertise. Commercial banking operates in fourteen of the top fifteen US metropolitan areas and is divided into three businesses: middle market banking, mid-corporate banking and real estate banking.

United States - Retail Lending Datamonitor (Published December 2008) Page 24

LEADING COMPANIES
Key Metrics Table 9:
Metric Revenues Net Income Profit Margin Total Assets Total Liabilities Employees

Key Financials: JP Morgan Chase & Co

2003 33,191.0 6,719.0 20.2% 770,912.0 724,758.0 96,367 2004 2005 2006 2007 42,738.0 54,248.0 61,999.0 71,372.0 4,466.0 8,483.0 14,444.0 15,365.0 10.4% 15.6% 23.3% 21.5% 1,157,248.0 1,198,942.0 1,351,250.0 1,562,147.0 1,051,595.0 1,091,731.0 1,235,730.0 1,438,926.0 160,968 168,847 174,360 180,667

All in $ millions, except for employee numbers and margins Source: Company Filings

DATAMONITOR

Figure 3:

Revenues & Profitability: JP Morgan Chase & Co

Revenues Net Income Profit Margin 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 2003 2004 2005 Year 2006 2007 Profit Margin (%)
Page 25

80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0

Source: Company Filings

US$ Millions

DATAMONITOR

United States - Retail Lending Datamonitor (Published December 2008)

MARKET FORECASTS

CHAPTER 7

MARKET FORECASTS

7.1

Market Value Forecast

In 2013, the United States retail lending market is forecast to have a value of $14,929 billion, an increase of 19.3% since 2008. The compound annual growth rate of the market in the period 2008-2013 is predicted to be 3.6%. Table 10: United States Retail Lending Market Value Forecast: $ billion, 2008-2013 Year 2008 2009 2010 2011 2012 2013 CAGR, 2008-2013:
Source: Datamonitor

$ billion 12,516.7 12,434.8 12,430.1 12,873.4 13,852.8 14,928.9

% Growth -4.40% -0.70% 0.00% 3.60% 7.60% 7.80% 3.6%

DATAMONITOR

Figure 4:

United States Retail Lending Market Value Forecast: $ billion, 2008-2013

$ billion 16,000 14,000 12,000 $ billion 10,000 8,000 6,000 4,000 2,000 0 2008 2009 2010 2011

% Growth 10.0% 8.0% 6.0% % Growth 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% 2012 2013

Source: Datamonitor

DATAMONITOR

United States - Retail Lending Datamonitor (Published December 2008) Page 26

MACROECONOMIC INDICATORS

CHAPTER 8
Table 11: Year 2004 2005 2006 2007 2008(e)

MACROECONOMIC INDICATORS
United States Size of Population (million) , 2004- 2008(e) Population (million) 293.0 295.7 298.4 301.1 303.8 % Growth

0.90% 0.90% 0.90% 0.90%

Source: Datamonitor

DATAMONITOR

Table 12:

United States GDP (Constant 2000 Prices, $ billion), 20042008(e) Constant 2000 Prices, $ billion 10699.0 11033.1 11370.0 11620.2 11701.5

Year 2004 2005 2006 2007 2008(e)

% Growth

3.10% 3.10% 2.20% 0.70%

Source: Datamonitor

DATAMONITOR

Table 13: Year 2004 2005 2006 2007 2008(e)

United States Inflation, 2004- 2008(e) Inflation Rate (%) 2.7 3.4 3.2 2.7 2.8 % Growth

27.40% -4.70% -16.40% 2.20%

Source: Datamonitor

DATAMONITOR

United States - Retail Lending Datamonitor (Published December 2008) Page 27

APPENDIX

CHAPTER 9

APPENDIX

9.1

Methodology
Datamonitor Industry Profiles draw on extensive primary and secondary research, all aggregated, analyzed, cross-checked and presented in a consistent and accessible style. Review of in-house databases Created using 250,000+ industry interviews and consumer surveys and supported by analysis from industry experts using highly complex modeling & forecasting tools, Datamonitors in-house databases provide the foundation for all related industry profiles Preparatory research We also maintain extensive in-house databases of news, analyst commentary, company profiles and macroeconomic & demographic information, which enable our researchers to build an accurate market overview Definitions Market definitions are standardized to allow comparison from country to country. The parameters of each definition are carefully reviewed at the start of the research process to ensure they match the requirements of both the market and our clients Extensive secondary research activities ensure we are always fully up-to-date with the latest industry events and trends Datamonitor aggregates and analyzes a number of secondary information sources, including:

National/Governmental statistics International data (official international sources) National and International trade associations Broker and analyst reports Company Annual Reports Business information libraries and databases Modeling & forecasting tools Datamonitor has developed powerful tools that allow quantitative and qualitative data to be combined with related macroeconomic and demographic drivers to create market models and forecasts, which can then be refined according to specific competitive, regulatory and demand-related factors Continuous quality control ensures that our processes and profiles remain focused, accurate and up-to-date

United States - Retail Lending Datamonitor (Published December 2008) Page 28

APPENDIX
9.2 Industry Associations
Consumer Bankers Association 1000 Wilson Blvd., Suite 2500, Arlington, VA 22209-3912, US Tel: 1 703 276 1750 Fax: 1 703 528 1290 www.cbanet.org

9.3

Related Datamonitor Research

Datamonitor Industry Profiles Global Retail Lending Retail Lending in Asia-Pacific Retail Lending in Europe Retail Lending in the United Kingdom Retail Lending in Germany Retail Lending in France Retail Lending in Japan

United States - Retail Lending Datamonitor (Published December 2008) Page 29