Welcome to Industry Focus, the podcast that dives into a different sector of the stock market every day.

It's Monday, January 29th, and we're taking a deep dive on the so-called Universal Banks today.

Those keeping score at home, that's Bank of America,

Citigroup, and J.P. Morgan. I'm your host Michael Douglas. I'm joined by Matt Frankel, as per usual.

Now, listeners, this is part two in a three-part series we're running on the big banks

Part one was our December 11th episode breaking down the investment banks that is Goldman Sachs and Morgan Stanley

We had some other news driven and end-of-year stories to finish up between then and now, but now we're on part two of the universal banks as you can imagine at some point we'll be doing part three, the commercial banks.

Now we'll be running these banks through the Onant Chocavalu framework.

Onant is the managing editor of fool.com and really back in 2014 wrote a fantastic article

really breaking down how to think about a bank and really how to understand its underlying business model.

So we'll be running them through that framework,

just like we did the Investment Banks on December 11th.

His framework for how to understand a bank stock

is a great accompaniment to this episode. So shoot me and email at industry focus at fool.com if you need the

link we're not going to get too much into the details of the various ratios because

he explains kind of the reasoning behind them.

So again that is a useful accompaniment to this episode. Okay so with that in mind let's

first talk in generalities and Matt I'll finally let you start talking.

What is a universal bank and how is it different from well another kind of bank?

So you pretty much have three kinds of banks. You have commercial banks which are your typical savings and loans.

Wells Fargo is a good example of this.

They're most of their business is simply taking in money as deposits and loaning it out to customers and profiting from the spread between them.

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