Outlook for Global Wholesale and Investment Banking - BlackRock ...

March 16, 2010BanksReturn characteristics dependent on level of alphagearing versus fees structure in product.4. Grow the Emerging Markets franchise with locallyfunded modelsNon-organic play – JVs with managed fund vehicles,acquisitions of fund vehicles in structured credit,synthetic and discretionary quant.3. Build post-trade, transaction banking and corporatebanking as franchise safe-havens and sources ofliabilitiesMore interest in full universal banking onshore tobuild local currency liability funding, throughpayments and cash-led corporate banking; JVs withlocal distributors or universal banking acquisitions.Non-organic play – wholesale-retail acquisitions orstakes in India, Russia, Saudi, Brazil, Indonesia.Post trade clearing and asset servicing capabilitiesas hedge against OTC and FIG disintermediation.Corporate cash management business to enhanceown deposit base through locked in funds.Trade and supply chain infrastructures withadvanced collateral valuation capabilities assubstitute for lending; helping high grade corporatesto co-finance their increasingly funding constrainedsuppliers.Return characteristics depend on the ability of thebank to deliver infrastructure and high end clientsolutions.Exhibit 34Business model evolutionBusiness modelimperatives1. Building scale inFlow business2. Improve leverageand liability structure3. Access to liabilityheavyhighgrowth marketsClient / ProductadjacencyStrategic responsesFinancial ResourceEfficiency• Release balancesheet, build AMbusinesses– Credit vehicles– Structured AMInfrastructureadjacency• Expanding flow capture– Electronic, liquidity search, internalisation– Expand sales, 3 rd party flow sourcing• Emerging Markets and Asia– Commercial and wholesalebanking– Full retail banking• TransactionBanking– Payments andcash– Trade Finance– Custody– SecuritiesSvcsNon-organic play – acquisitions of fundsadministration, corporate trust and clearing firms aswell as cooperation with service companies to thephysical supply chain.4. Lower volatilityincome streamsSource: Oliver Wyman• Distribution– Trust and wealth– Public distribution31