US banking giants have captured the lion’s share of industry profits since 2015

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America’s four biggest banks are on track to claim the industry’s biggest share of profits in nearly a decade, a sign of how they are consolidating their market dominance.

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

Together they account for 44% of US banking industry profits – the highest share for the first nine months of the year since 2015 – even though the group accounts for more than 4,000 of the country’s other banks.

Including US Bank, PNC and Truist, the seven largest banks by deposits generated nearly 56% of total banking profits in the first nine months of the year, up from 48% in the same period in 2023.

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

The data come from earnings reported to the Federal Deposit Insurance Corporation, the banking regulator, and relate only to profits reported by U.S. banking institutions.

Banks may also include different businesses in the data they report and larger banks such as JPMorgan and BofA includes income from investment banking and trading activities that many smaller banks cannot compete with.

While the figures don’t exactly match the earnings banks report to investors, they show the growing importance of scale in the banking industry as it struggles with operating costs. operations, technology, marketing and higher operations. Larger businesses can spread these costs across more customers.

“Once you’re that far behind the biggest banks, it becomes really difficult to make the necessary investments and gain name recognition,” said Oppenheimer banking analyst Chris Kotowski. .

“We are a very mobile society, especially since Covid. For example, so many people move from New York to Florida, do you really need to have a bank in Florida that is different from the bank in New York?

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

The dominant position of the largest US banks has prompted calls for more consolidation among smaller banks to better compete.

Trading activity has slowed in recent years, but there is hope that the incoming Trump administration may adopt a more accommodative policy.

Bob Diamond, a former Barclays chief who now runs an investment firm, told the Financial Times in early December that he believes the number of US banks could more than halve in the next three years.

But the main competitors of the big banks are increasingly non-banks, including private credit unions, which offer bank-like services.

Financial institutions such as Apollo, Affirm and Rocket Mortgage are increasingly influential lenders to corporations, homebuyers and consumers, even though the lending is often sponsored by banks.

In the mortgage market, non-bank companies now manage more than half of all home loans in the US compared to 11% in 2011.

In his annual letter to shareholders, JPMorgan chief executive Jamie Dimon called tech giant Apple “effectively” operating like a bank by holding, moving and lending money.