Top 4 US Banks Hold Highest Industry Total Profit Share Since 2015

Reuters Yonhap News

The profits of the four major U.S. banks reached their highest share of the total profits in the U.S. banking industry since 2015.

According to financial information firm BankRegData on the 23rd (local time), the four major U.S. banks?JP Morgan, Bank of America (BoA), Citigroup, and Wells Fargo?recorded approximately $88 billion (about 128 trillion KRW) in profits from January to September this year.

This accounts for 44% of the total profits in the U.S. banking industry, marking the largest share since 2015. Expanding to the seven largest U.S. banks by deposits, including US Bank, PNC, and Truist, the industry's total profit share reaches 56%. The remaining 44% is the combined share of profits from over 4,000 other banks.

It is analyzed that large banks are increasingly widening the gap with small and medium-sized banks due to economies of scale, diverse business models, and lower capital procurement costs. In particular, large banks report massive revenues generated from investment banking and trading businesses, which are difficult for small and medium-sized banks to enter.

Accordingly, recent competitors to large banks are non-traditional financial service companies such as Apollo, Affirm, and Rocket Mortgage. The mortgage loans managed by these companies accounted for only 11% in 2011 but now exceed half of the market.

Within the U.S. banking industry, there are calls for active mergers and alliances among small and medium-sized banks to compete with large banks. Some expect that mergers and acquisitions (M&A) deals will increase under the second Trump administration.

Bob Diamond, former CEO of Barclays, said, "The number of U.S. banks could be reduced by more than half within the next three years."

This content was produced with the assistance of AI translation services.