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The big four US banks are on track to take their biggest share of corporate profits in nearly a decade, a sign of how they are consolidating their core market.
JPMorgan Chase, Bank of America, Citigroup and Wells Fargo, the big four US banks with deposits and assets, collectively reported about 88bn of profits in the first nine months of 2024, according to calculations by the Financial Times based on figures from industry tracker BankRegData.
Together they account for 44 percent of US bank profits – the highest share in the first nine months of the year since 2015 – although the pool includes more than 4,000 other banks in the country.
Including US Bank, PNC and Truist, the seven largest banks by deposit accounted for nearly 56 percent of all bank revenues in the first nine months of the year, up from 48 percent during 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 by the Federal Deposit Insurance Corporation, the bank regulator, and relates only to earnings reported by US banking institutions.
Banks can also include different businesses within the database they describe, with large banks such as JPMorgan and BofA includes income from investment and commercial banking where many smaller banks do not compete.
While the numbers don't exactly match the profits banks report to investors, they do reflect the growing importance of the banking industry as it faces higher operational, technical, marketing and operational costs. Large businesses can spread these costs over many customers.
“Once you get less than the biggest banks, it will be difficult to make the necessary investments and have the same name,” said Oppenheimer banking analyst Chris Kotowski.
“We are a mobile society, especially since Covid. Many people move from New York to Florida for example, do you really want to have a different bank in Florida than New York?
The US has an unusually fragmented banking system, largely because consolidation was delayed by restrictions on international banking that were only lifted in the 1980s.
The dominant positions of the largest US banks have fueled calls for more consolidation among smaller banks to better compete.
Dealmaking has slowed in recent years, however there is hope that the incoming Trump administration may adopt a more permissive policy.
Bob Diamond, the former head of Barclays who now runs the investment business, told the Financial Times in early December he believed the number of US banks could more than halve in the next three years.
But the big banks' main competitors are increasingly non-banks, including private equity firms, that offer banking-like services.
Financial institutions such as Apollo, Affirm and Rocket Mortgage have increased the influence of lenders on companies, consumers and consumers, although these loans are often financed by banks.
In the mortgage market, non-bank companies now control more than half of US mortgage loans compared to 11 percent in 2011.
In his annual letter to shareholders, the chief executive of JPMorgan Jamie Dimon called the tech giant Apple as “effective” that acts as a bank by holding, moving and lending money.