US banking giants have the largest industry profits since 2015

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The four largest US banks are on pace to capture the largest share of the industry’s profitability in a decade, a sign of how they are consolidating their dominant market position.

JPMorgan Chase, Bank of America, Citigroup and Wells Fargo, the four largest American banks In terms of deposits and assets, a profit of about $88 billion was reported in the first nine months of 2024, according to calculations by the Financial Times.

Together, they account for 44 percent of the U.S. banking industry’s profits — the highest share in the first nine months of the year since 2015 — even though the pool includes more than 4,000 of the nation’s banks.

The seven largest banks, including Bank of America, PNC and Trust, made up 56 percent of bank profits on deposits in the first nine months of the year, up from 48 percent in the same period in 2023.

JPMorgan, BofA, Citi, Wells, US Bank and Truist declined to comment. PNC did not respond to requests for comment.

The data comes from earnings for the Federal Deposit Insurance Corporation, the bank regulator, and relates only to profits reported by U.S. banking entities.

Banks may include various businesses and large banks in the information they provide. JPMorgan And BofA includes income from investment banking and business that many smaller banks don’t compete with.

While the figures do not fully match the returns banks deliver to investors, they do reflect the growing importance of scale in the banking industry, as well as technology, marketing and operational costs. Large businesses can spread these costs over many customers.

“Once you’re below the big banks, it’s going to be very difficult to make the necessary investments and get the same reputation,” said Oppenheimer banking analyst Chris Kotowski.

“We are a very mobile society, especially since Covid. For example, many people moving from New York to Florida, do you want to have a different bank in Florida than in New York?

The United States does not have an unusually fragmented banking system, as consolidation has been delayed by restrictions on interstate banking that were lifted only in the 1980s.

The top positions at the biggest US banks have called for more consolidation among smaller banks.

Negotiations have stalled in recent years, but there is hope that the incoming Trump administration may pursue a more permissive policy.

Bob Diamond, the former head of Barclays and now head of the investment firm, told the Financial Times in early December that he believed the number of US banks could more than halve over the next three years.

But the big banks’ main competitors increasingly include private banking firms.

Financial institutions such as Apollo, Affirm and Rocket Mortgage are becoming increasingly influential for corporates, home buyers and consumers, although these loans are often funded by banks.

In the mortgage market, non-bank companies service more than half of US home loans, compared to 11 percent in 2011.

In his annual shareholder letter, JPMorgan CEO Jamie Dimon called tech giant Apple “efficient” in that it acts like a bank by holding, moving and lending money.