Global Diversified

Financials
Industry Profile

Reference Code: 0199-2043

Publication date: April 2006

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Global - Diversified Financials

© Datamonitor (Published April 2006) Page 2
EXECUTIVE SUMMARY

EXECUTIVE SUMMARY

Market Value

The global diversified financials industry group grew by 3.2% in 2005 to reach a value
of $935.9 billion.

Market Segmentation

North America accounts for 55.2% of the global industry group's value.

Market Share

Market leading Citigroup accounts for 12.9% of the industry group's value.

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CONTENTS

TABLE OF CONTENTS

EXECUTIVE SUMMARY 3

CHAPTER 1 Market Overview 6

1.1 Market Definition 6

1.2 Research Highlights 6

1.1 Market Analysis 7

CHAPTER 2 Market Value 8

CHAPTER 3 Market Segmentation 9

CHAPTER 4 Market Share 10

CHAPTER 5 Competitive Landscape 11

CHAPTER 6 Leading Companies 13

1.1 UBS AG 13

1.2 Citigroup Inc. 13

1.2 ING Groep N.V. 14

1.4 Credit Suisse Group 14

1.5 Deutsche Bank AG 14

CHAPTER 7 Further Reading 15

1.1 Sources 15

1.2 Related Datamonitor Research 15

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CONTENTS

LIST OF TABLES

Table 1: Global Diversified Financials Industry Group Value: $ billion, 2001-2005........... 8

Table 2: Global Diversified Financials Industry Group Segmentation: % Share, by Value,

2005 ..................................................................................................................... 9

Table 3: Global Diversified Financials Market Share: % Share, by Value, 2005............. 10

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MARKET OVERVIEW

CHAPTER 1 MARKET OVERVIEW

1.1 Market Definition

This report has been compiled under the diversified financials GICS category. This
GICS category encompasses the diversified financial services, consumer finance,
and capital markets sub-industries.

As diversified financials do not constitute an industry in a meaningful sense, the

report is based on the combined revenues of the top twenty-one financial services
companies with significantly diversified operations in the financial services markets.
This approach is considered a useful proxy to give readers an indication of the
developments within the diversified financials GICS category. Any currency
conversions used in the creation of this report have been calculated using constant
2005 annual average exchange rates.

1.2 Research Highlights

Based on the value of the global diversified financials industry group as a basket of
the top twenty-one firms' revenues, the industry generated total revenues of $935,861
million in 2005, representing a compound annual rate of change (CARC) of -0.3% for
the five-year period spanning 2001-2005.

Geographically, the leading revenue source for the global diversified financials
industry group is the North American market, which generated total revenues of
$516,887 million in 2005; equivalent to 55.2% of the overall industry group value.

Providing the sector continues in its current vein, the outlook for 2006 and onwards is
positive. Each sector is experiencing substantial expansion and, as a whole, with
interest rates remaining low and large parts of the world opening up to investment
opportunities, industry players can expect this trend to continue.

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MARKET OVERVIEW

1.3 Market Analysis

Companies within the global diversified financials industry, which is comprised of

diversified financial services, consumer finance, and capital markets sub-industries,
have seen revenues nosedive before they were able to cut back and return to speed.
The basket of companies, after seeing revenues shrink by 9.3% and 4.6% in 2002
and 2003 respectively, returned to growth of 10.8% in 2004 and 3.2% in 2005.
Recent economic growth, low rates of interest and declining losses on loans have
helped to set the industry back on track.

Based on the value of the global diversified financials industry group as a basket of
the top twenty-one firms' revenues, the industry generated total revenues of $935,861
million in 2005, representing a compound annual rate of change (CARC) of -0.3% for
the five-year period spanning 2001-2005.

Since 2004 the increase in consumer confidence and the stronger consequent global
economic performance have contributed towards an annual growth rate of 10.8%, as
revenues totaled $907,252 million in 2004.

Geographically, the leading revenue source for the global diversified financials
industry group is the North American market, which generated total revenues of
$516,887 million in 2005; equivalent to 55.2% of the overall industry group value. In
comparison, the European sector was worth $391,165 million, representing 41.8% of
the industry group value share.

Europe has undergone strong performance in recent years; part of this improvement
can be attributed to the expansion of the European market with further countries
being granted access to the European Union. Major players are increasingly viewing
Eastern Europe as an expanding area of opportunity.

Providing the sector continues in its current vein, the outlook for 2006 and onwards is
positive. Each sector is experiencing substantial expansion and, as a whole, with
interest rates remaining low and large parts of the world opening up to investment
opportunities, industry players can expect this trend to continue. Even further
consolidation is being driven by the urge to create larger businesses and widen
geographic scope in an attempt to offer an array of financial packages to consumers
wanting a one-stop shop.

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MARKET VALUE

CHAPTER 2 MARKET VALUE

The global diversified financials industry group grew by 3.2% in 2005 to reach a value
of $935.9 billion.

The compound annual rate of change (CACR) of the industry group in the period
2001-2005 was -0.3%.

Table 1: Global Diversified Financials Industry Group Value: $ billion,

2001-2005

Year $ billion $ billion % Growth

2001 947.1 947.1

2002 858.8 858.8 -9.30%
2003 819.0 819.0 -4.60%
2004 907.3 907.3 10.80%
2005 935.9 935.9 3.20%

CACR, 2001-2005: -0.3%

Source: Datamonitor D AT AM ON IT O R

Figure 1: Global Diversified Financials Industry Group Value: $ billion,

2001-2005

$ billion % Growth

1,000 15.0%
900
800 10.0%
700 5.0%
% Growth
$ billion

600
500 0.0%
400
300 -5.0%
200 -10.0%
100
0 -15.0%
2001 2002 2003 2004 2005

Source: Datamonitor D AT AM ON IT O R

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MARKET SEGMENTATION

CHAPTER 3 MARKET SEGMENTATION

North America accounts for 55.2% of the global industry group's value.

Europe comprises a further 41.8% of the global industry group.

Table 2: Global Diversified Financials Industry Group Segmentation: %

Share, by Value, 2005

Geography % Share

North America 55.20%

Europe 41.80%
Rest of World 3.00%

Total 100.0%

Source: Datamonitor D AT AM ON IT O R

Figure 2: Global Diversified Financials Industry Group Segmentation: %

Share, by Value, 2005

Rest of World
3.0%

Europe
41.8%
North America
55.2%

Source: Datamonitor D AT AM ON IT O R

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MARKET SHARE

CHAPTER 4 MARKET SHARE

Market leading Citygroup accounts for 12.9% of the industry group's value.

Second placed ING Group has a 9.4% market share.

Table 3: Global Diversified Financials Market Share: % Share, by Value,

2005

Company % Share

Citigroup Inc. 12.90%

ING Groep N.V. 9.40%
UBS AG 8.00%
Credit Suisse Group 7.10%
Deutsche Bank Ag 6.90%
Other 55.70%

Total 100.0%

Source: Datamonitor D AT AM ON IT O R

Figure 3: Global Diversified Financials Market Share: % Share, by Value,

2005

Citigroup Inc.
12.9%

ING Groep N.V.

9.4%

UBS AG
Other 8.0%
55.7%
Credit Suisse
Group
Deutsche7.1%
Bank
Ag
6.9%

Source: Datamonitor D AT AM ON IT O R

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COMPETITIVE LANDSCAPE

CHAPTER 5 COMPETITIVE LANDSCAPE

While being an extremely competitive basket, this industry is also heavily

consolidated as the leading six players account for almost half of the basket share.
Between them, Citigroup, ING UBS, Fortis, Credit Suisse and Deutsche Bank
generate 44.3% of the industry group's global revenues. Citigroup has managed to
retain its market-leading share despite the recent period in which it experienced
difficult times in all the major markets outside the US, in Japan and Europe. Fortis
has begun a major restructuring of its IT network, aimed at reducing costs by merging
IT operations. Meanwhile, Credit Suisse launched a new brand image in January
2006 in a bid to reflect the company’s new unified structure and strategic direction.

Using lawsuits as a vehicle, New York State Attorney General Eliot Spitzer has driven
some far-reaching reforms in the US financial marketplace. He has laid down
significant guidelines, which include severance of the link between equity analysts
and investment banking executives and prohibition of investment banking input into
analysts’ compensation.

With investment banks paying high fines for their actions in the past, these reforms
have set a new standard for research and have changed the manner in which
research has been conducted and used. Companies are accepting the new moves
towards transparency and many have instigated reviews of their reporting and
business methods in order to identify and rectify any deficiencies before they attract
the attention of the authorities.

The introduction of the Sarbanes-Oxley Act to promote transparency in company

accounting procedures in the wake of the Enron scandal increased liabilities for
financial service providers in the US, which in turn pushed up administration costs.
The global concern the accounting scandal caused led to the widespread recognition
within the industry that a strong industry with ethical operations is imperative:
measures to increase transparency have been implemented, reassuring clients and
engaging their trust. While part of this new transparency is as a result of increased
legislation, companies are now promoting their own initiatives in order to identify and
correct discrepancies before regulators do.

The Asia-Pacific region continues to burgeon as an economic center; foreign players

have not, however, made quite the inroads that had been anticipated. There have
been a variety of reasons for this, including the fact that Chinese investment banking
fees are below international levels and foreign banks still face restrictions despite the
Chinese government’s deregulation efforts. It has been observed that a coherent and
far reaching strategy is required to succeed in the region, with local relationships
definitely beneficial.

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COMPETITIVE LANDSCAPE

Since 2002, the Chinese government has allowed foreigners to invest in domestic
securities, but this market is still in its infancy and needs time to develop. Whilst
China may have seen the most aggressive expansion efforts, India and Russia are
also attracting attention, and Morgan Stanley is set to expand its Middle East
business by establishing an office in Qatar.

Other regions for expansion are Eastern Europe and the expanding European Union.
The most common method of expansion is inorganic, by mergers and acquisitions
and through strategic partnerships with local players. Fortis has identified the
European Union as holding major interest and has revised its objectives and
strategies with the aim of becoming a leading competitor in this sector. While it aims
to keep its eye on the ball with selective expansions in North America and Asia – its
recent stake increase in its Chinese joint venture Fortis Haitong, for instance, and the
acquisition of Malaysia National Insurance Holdings – and is considering a joint
venture in India, Fortis’s predominant aim is to exploit the opportunities in the
changing European landscape.

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LEADING COMPANIES

CHAPTER 6 LEADING COMPANIES

6.1 UBS AG

UBS specializes in the provision of financial services including retail banking in

Switzerland, corporate banking, asset management, and corporate financial services
worldwide. UBS's clients include international corporations; small and medium sized
businesses; governments and other public bodies; financial institutions; market
participants; and individuals. The company manages business through four divisions:
wealth management and business banking; investment bank; global asset
management, and wealth management USA. It is headquartered in Zurich,
Switzerland and employs about 67,500 people.

In full-year 2005, UBS reported net profit attributable to UBS shareholders

(“attributable profit”) of CHF 14,029 million, with CHF 9,844 million from continuing
operations and CHF 4,185 million from discontinued operations. For our financial
businesses, attributable profit from continuing operations was a record CHF 9,442
million (this excludes the impact of Private Banks & GAM, which was sold in
December 2005). n fourth quarter 2005, UBS reported attributable profit of CHF 6,487
million. This includes a contribution from discontinued operations of CHF 3,858
million, mainly related to the gain from the sale of Private Banks & GAM.

6.2 Citigroup Inc.

Citigroup is a global financial services company. It provides consumers, corporations,

governments and institutions with a broad range of financial products and services,
including consumer banking and credit, corporate and investment banking, insurance,
securities brokerage, and asset management. Major brand names under Citigroup's
trademark red umbrella include Citibank, CitiFinancial, Primerica, Smith Barney,
Banamex, Travelers Life and Annuity, Citi Cards, CitiMortgage, CitiInsurance, Diners
Club, Citigroup Asset Management, The Citigroup Private Bank, and CitiCapital.
Citigroup is headquartered in New York City.

The company generated total revenues of $120.3 billion in 2005, this representing an
increase of 11.1% on the previous year. Citygroup's net income was $24.6 billion in
2005, an increase of 44.3% on 2004.

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LEADING COMPANIES

6.3 ING Groep N.V.

ING Groep is a Dutch international financial institution, offering banking, insurance

and asset management. The company has its operations in more than 50 countries.
The company is headquartered in Amsterdam, and has a work force of about 115,000
employees.

The company generated total revenues of $115.3 billion in 2005, this representing an
increase of 8.3% on the previous year. ING's net income was $8.1 billion in 2005, an
increase of 59% on 2004.

6.4 Credit Suisse Group

Credit Suisse Group is a financial services company involved in advising clients in all
aspects of finance. The group's structure comprises of three business units, Credit
Suisse (including the private banking; and corporate and retail banking segments);
Credit Suisse First Boston (including the institutional securities; and wealth and asset
management segments; and Winterthur (including the life and pensions; and non-life
segments). It is headquartered in Zurich, Switzerland and employs about 60,500
people.

The company generated total revenues of $64 billion in 2005, this representing an
increase of 16.4% on the previous year. Credit Suisse posted a net income of $4.9
billion in 2005, an increase of 692.9% on 2004.

6.5 Deutsche Bank AG

Deutsche Bank is one of the world´s leading international financial service providers.
The company offers investment, financial and related products and services to private
individuals, corporate entities and institutional clients around the world. The bank
serves customers in about 74 countries worldwide. It is headquartered in Frankfurt,
Germany and employs about 65,500 people.

The company generated total revenues of $72.6 billion in 2005, this representing an
increase of 19.7% on the previous year. Deutsche Bank posted a net income of $4.2
billion in 2005, an increase of 24.7% on 2004.

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CONTENTS

CHAPTER 7 FURTHER READING

7.1 Sources

This report is based on a combination of primary Datamonitor research, including

online, face-to-face and telephone interviews with consumer and industry players,
and secondary research using various sources (including trade associations, news
providers and others).

Industry Associations

The Bond Market Association

360 Madison Ave.,New York, NY 10017-7111, USA
Tel: 1 646 637 9200
Fax: 1 646 637 9126
http://www.bondmarkets.com
World Federation of Exchanges
39 rue Cambon, F 75039 Paris Cedex 01, France
Tel: 33 1 5862 5400
Fax: 33 1 5862 5048
http://www.world-exchanges.org

7.2 Related Datamonitor Research

Datamonitor Industry Profiles

Global Asset Management & Custody Banks ($200)

Global Investment Banking & Brokerage ($200)
Global Diversified Capital Markets ($200)
Global Capital Markets ($200)
Global Insurance Brokers ($200)
Global Life & Health Insurance ($200)
Global Multi-line Insurance ($200)
Global Property & Casualty Insurance ($200)
Global Reinsurance ($200)
Global Insurance ($200)
Global Diversified REIT's ($200)

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