US banking giants capture biggest share of industry profits since 2015

Stay informed with free updates

Simply sign up US Bank myFT Digest — delivered straight to your inbox.

The four largest U.S. banks are set to capture their biggest share of the industry’s gains in nearly a decade, a sign of how they are consolidating their dominant market positions.

JPMorgan Chase, Bank of America, Citigroup and Wells Fargo are the four largest US Bank Through deposits and assets, they reported a combined profit of about $88 billion in the first nine months of 2024, according to calculations by the Financial Times based on figures from industry tracker BankRegData.

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

The seven largest banks by deposits, including US Bank, PNC and Truist, made up about 56 percent of all banking profits in the first nine months of the year, up from 48 percent for 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 reported to the Federal Deposit Insurance Corporation, a banking regulator, and relates only to profits reported by US banking firms.

Banks may include different businesses in their reported data and larger banks eg JP Morgan And BofA includes income from investment banking and trading where many smaller banks don’t compete.

Although the figures do not exactly match the earnings reported by banks to investors, they demonstrate the growing importance of size in the banking industry as it is associated with higher regularity, technology, marketing and operational costs. Larger businesses can spread these costs over more customers.

“Once you get below the biggest banks, it becomes really difficult to make the necessary investments and get the same name recognition,” said Chris Kotowski, an Oppenheimer banking analyst.

“We are a very mobile society, especially since Covid. Many people who move from New York to Florida, for example, do you really need to have a different bank in Florida than in New York?

The United States has an unusually fragmented banking system, in large part because consolidation was delayed by restrictions on interstate banking that were lifted only in the 1980s.

The dominant positions of the largest US banks have called for more consolidation among smaller banks to better compete.

Deal-making has slowed in recent years, but the incoming Trump administration is expected to adopt a more permissive policy.

Former Barclays chief Bob Diamond, who now runs an 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 are increasingly non-banks, including private credit companies, which offer bank-like services.

Financial institutions such as Apollo, Affirm and Rocket Mortgage have become increasingly dominant lenders to corporations, home buyers and consumers, although these loans are often financed by banks.

In the mortgage market, non-bank companies now handle more than half of U.S. home loans, up from 11 percent in 2011.

In his annual letter to shareholders, JPMorgan Chief Executive Jamie Dimon called tech giant Apple “effectively” acting as a bank by holding, transferring and lending money.