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Bank of New York

Essay by   •  November 14, 2010  •  Case Study  •  2,829 Words (12 Pages)  •  1,188 Views

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Executive Summary

Founded in 1784, the Bank of New York is the oldest bank in the United States. It was the first bank in New York that opened just months after the departure of British troops from American soil in lower Manhattan. During that time period the monetary system was complex and confusing. The founders decided that The Bank of New York wasn't going to be a common institution that capitalized on land; it focused on specie, which is money in coins. Then in 1792 the first corporate stock to trade on the newly established New York Stock Exchange was the Bank of New York.

During the course of their 220-year history, The Bank of New York has seen the country through turbulent times - seven wars, ten economic depressions and the World Trade Center disaster. And yet, The Company has survived all these crises and emerged even stronger..

The Bank of New York is in the industry of Money Center Banks, which provide many services that enable institutions and individuals to move and manage their financial assets in more than 100 markets worldwide. This company has a long tradition of collaborating with clients to focus on securities servicing, treasury management, investment management, and individual and regional banking services. This company also has an extensive global client base.

The Bank of New York is ranked 15th in its industry with a capital market of 21.2 billion. Some of its top three competitors are Citigroup Inc, JP Morgan Chase, and State Street Corp. Given its long history and conservative approach, it is no wonder that The Bank of New York is one of the leading retail banks in the Metropolitan Area. It has 350 locations which not only offer traditional banking, but insurance and investment services.

Although the stock price of The Bank of New York has decreased over the past year, it is our opinion that it would be a good opportunity to buy the stock at its price. The most recent quarterly earnings have been much higher than analysts' forecasts have predicted. The Bank of New York earnings growth in the past year has accelerated more rapidly than it has in the past three years.

The Bank of New York - Industry position

Founded in 1794, The Bank of New York is New York's first and oldest bank. It opened for business at the Walton House in lower Manhattan. During that time period the monetary system was complex and confusing. The founders decided that The Bank of New York wasn't going to be a common institution that capitalized on land; it focused on specie, which is money in coins. The New York Stock Exchange was formed in 1792, and the first Corporation stock to be traded on the NYSE was The Bank of New York.

The history of this bank began on February 23, 1794 with a small advertisement in the New York Packet. Alexander Hamilton, a respected New York attorney and future statesman, was appointed to write the new banks constitution, and became the most actively involved person in the Bank of New York. He negotiated the new US government's first loan from the Bank of NY for $200,000 against the US Treasury, who drew a series of warrants on the Bank. These warrants were to establish the credit of the United States and the economic independence of the young nation. Alexander Hamilton has left a lasting imprint on the Banks philosophy that remains with the bank today.

During the course of its 220 year history, The Bank of New York has seen its country go through some turbulent times, seven wars, ten economic depressions and the World Trade Center disaster. The bank has survived these entire crises and has come out even stronger owning to a commitment of certain shared and enduring values - Integrity, Respect, Personal Responsibility, Teamwork and Excellence - and a firm focus on the needs of their clients. These core values formed the foundation for everything they do.

Today the Chairman and CEO is Thomas A. Renyi. He has successfully directed The Bank of New York's transformation from a traditional commercial bank to a global leader in securities servicing for issuers, investors and financial intermediaries.

The industry that the Bank of New York is associated with is in the industry of Money Center Banks. The bank provides many services that enable institutions and individuals to move and manage their financial assets in more than 100 markets worldwide. This company has a long tradition of collaborating with clients to focus on securities servicing, treasury management, investment management, and individual and regional banking services. This company also has an extensive global client base including a broad range of leading financial institutions, corporations, government entities, endowments and foundations.

The Bank of New York is ranked 15th in its industry with a capital market of 21.2 billion. Some of its top three competitors are Citigroup Inc, JP Morgan Chase, and State Street Corp. The Bank of New York has maintained its position well within the banking industry and with its top competitors. Its revenue growth has been well within the industry average. Earnings per share have been also within the industry average and above J.P Morgan Chase. Its Profit earnings ratio has been actually above the industry standards.

A view of the Bank of New York stock value will show that it has been stable and on a constant growth pattern which is also similar to the industry pattern. As a world wide securities service specialist, investors are able to direct purchase stock or sell stock without going through a broker. An investor is also able to view account balances, transactions, and check history.

Given its long history and conservative approach, it is no wonder that The Bank of New York is one of the leading retail banks in the Metropolitan Area. It has 350 locations which not only offer traditional banking, but insurance and investment services. The Bank of New York is probably one of the most lucrative and growing bank in its category, out performing other major banks in the same industry.

Ratio Analysis

The objective of the analysis of the Bank of New York is to evaluate the company's overall financial standing. In researching the company and its relative position in its industry I discovered some interesting points. The Bank of New is ranked 15th in the Money Center Banks Industry due to it's market cap of $21.2Billion. Market Cap is short for market capitalization

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