Financial services

Financial services is the largest industry (or category of industries) in the world in terms of earnings (20% of market cap in the S&P 500 in 2004). Financial services is a term used to refer to the services provided by the finance industry. Banks, insurance companies, investment banks, and brokerages, are examples of the types of firms forming this industry: They provide money and investment and related services.

Glossary

Glossary for reading financial services reports

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• Asset sensitive - A financial institution that has a negative duration of equity may also be described as having a positive gap or as being asset sensitive. (American Banker Magazine glossary)
• Liability sensitive - The inverse of asset sensitive.
• Charge-offs - written off debt.
• Cost of funds - the cost of loan capital, the cost of funding assets. The best things in life are free, the same goes for liabilites, free liabilities include interest free checking accounts.
• Negative operating leverage - simply strength of earnings, the formula is sometimes the operating income as a percentage of gross income which measures how large or small the fixed costs are.