Seeking to prove banking and commerce may be mixed successfully, the Office of Thrift Supervision sent an 18-page report to lawmakers last week detailing the types of businesses conducted by the 100 or so nonfinancial companies that own a single thrift.
Currently, 515 thrifts, with $467 billion of assets, are controlled by 704 unitary thrift holding companies. But just 102 of those holding companies, owning 73 thrifts, engage in nonbanking activities, OTS said. These thrifts hold $196 billion, or 26%, of the industry's assets.
The activities conducted by their parent companies include:
Real estate development, investment, and management.
Insurance sales and underwriting.
Equity and fixed income investment.
Four unitary thrift holding companies own hotels, and two own convenience stores. Other businesses range from car rentals to movie theaters, the OTS said. "It appears these thrifts were purchased because they offer some 'synergy' between the thrifts' customers and the customers of the commercial firm," the study said. Unitary thrift holding companies are not required to obtain OTS approval to enter new nonfinancial businesses, the agency noted.
Being owned by a nonfinancial company provides thrifts with several benefits, OTS noted. Thrifts gain access to greater financial resources and a wider range of business and managerial expertise, the agency said.
Thrift customers, the agency added, are offered a variety of services from a single source. "Customers benefit when they are able to do business with an integrated financial services company," the study said.
OTS also said 39 thrifts are held by multiple thrift holding companies and 97 are controlled by bank holding companies. There are 685 independent thrifts, with $769 billion of assets.
While multiple thrift holding companies are far more restricted than unitaries, they may engage in a wide range of real estate-related activities, including development, the OTS noted. Banks and bank holding companies are banned from engaging in these activities.