Lending

Lending

Brief Excerpt from Industry Overview Chapter:

Companies in this industry provide secured and unsecured loans and other credit and financing products but do not act as depository banks. Major companies include US-based American Express, Capital One Financial, Discover Financial, OneMain Holdings, and SLM (better known as Sallie Mae), as well as Housing Development Finance (India) and Provident Financial (UK).

COMPETITIVE LANDSCAPE

Demand is driven by interest rates, consumer confidence, and capital spending by businesses. The profitability of individual companies depends on their ability to originate, service, and collect loans, as well as to collect fees and interest on credit and other financing products. Large companies have economies of scale in securing access to capital. Small companies can compete effectively by specializing. The US industry is highly concentrated: the top 50 companies account for about 80% of revenue.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major products and services include residential mortgage loans which accounts about 45% of the industry revenue, followed by credit card services (about 30%). Other products include consumer vehicle loans, loans to non-financial businesses, automobile and light- duty truck leasing services, and unsecured loans to consumers.