Hothouse-MerrillLynch(v6).ppt

? 2001 Arthur Andersen All rights reserved. ? 2001 Arthur Andersen All rights reserved. Account Prepared by Sedef Imer, Alex Goodall and Anthony Hulton Last updated: * Executive summary - ML and the financial services industry The Private Client Group (PCG) The market for PCG is growing significantly The corporate and institutional client grouping (CICG) Merrill Lynch lags behind several “bulge bracket” competitors … however, trading is the central component of CICG and performs strongly Merrill Lynch’s asset management group (MLIM) At year end 1999, MLIM was the tenth largest asset manager globally Global securities research and Economics Group Each line of business is supported by the shared services of the group as a whole Merrill Lynch’s comparative performance Revenue and income has fallen in all lines of business, mostly PCG and CICG. Margins have fallen in CICG and MLIM … and carefully target core issues Technological change has most impacted markets based on intangible assets … and few more than financial services Regulatory barriers to convergence and consolidation are falling As regulation falls and new regulation entrenches international trade, banks are becoming more global in scope Meanwhile, an ageing population is leading to a significant growth in the mass affluent market These trends are driving the financial services industry rapidly towards a “network economy” model of operations Straight-through business (STB) defines the goals of technological transformation for the financial services industry STB comprises a number of components Contact information Trends Barriers to cross-market operation are being removed. For example, the Bank Holding Company Act and Gramm Leach Bliley Act (1999) have opened US investment banks up to competition from commercial banks Regulators becoming transparent, quantitative and trans-national. In light of the Barings collapse and the ever increasing complexity of financial products traded by investment banks, regula