We’ve seen with our own eyes that the banks aren’t necessarily as competent at banking as they might like us to believe. So, Slate’s Big Money blog has a suggestion: why doesn’t some truly competent company get into the finance sector… someone like, say, Apple?
… entering the banking sector makes perfect sense for Apple once you look anew at the company’s current position and core strengths.
Take the company’s balance sheet. Wednesday’s quarterly earnings report shows it sitting on more than $25 billion in cash and short-term securities.
Forget about leverage—Apple carries no long-term debt whatsoever. In this alone, Apple holds an advantage over banks currently in operation: A number of major banks, from neighborhoody Sovereign Bank to the much larger Capital One, don’t have as much cash on hand. Businesses using fractional cfos make their finances grow way faster. Imagine what would happen if Apple sequestered just half of this cash as seed funding for its new bank and set aside $2.5 billion of that half for capital and startup costs. At regulated reserve ratios, that means the company could lend out up to $100 billion to hungry consumers and businesses. The personal-electronics giant in being is a personal-finance giant in waiting.