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Big Banking
Christian Hudspeth

The Five Largest US Banks in 2015: Who Is Winning?

by Christian Hudspeth | Dun & Bradstreet Editor

May 26, 2015 | No Comments »

Big BankingDespite the “Too Big to Fail” mantra that used to threaten the image of mega-sized banks years ago, consumers and businesses have actually begun to hold more of their money in large banks in the years since the financial crisis.

In fact, the nation’s five largest banks — JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, and U.S. Bancorp — now control nearly 45% of the $15.3 trillion in assets held by all US banks, according to data compiled from SNL Financial. By comparison, in 1991 the five largest US banks controlled just 10% of industry assets — roughly the same amount that Wells Fargo alone controls today.

Still, it hasn’t exactly been smooth sailing in terms of business growth. You can see how the five largest US banks fared in 2014 in the table below:

Results of Five Largest U.S. Banks (2014)

Bank Total Assets
JPMorgan Chase & Co. 2,573.13 102,102 -3.93% 21,762 21.42%
Bank of America Corp. 2,104.53 95,181 -6.41% 4,833 -57.72%
Citigroup Inc. 1,842.53 90,572 -2.13% 7,313 -46.72%
Wells Fargo & Company 1,687.16 88,372 0.34% 23,057 5.39%
U.S. Bancorp 402.53 21,392 1.58% 5,851 0.26%

Source: Dun & Bradstreet

As you can see, just two banks posted overall business growth in the past year, Wells Fargo and U.S. Bancorp. Only three reported profit growth for the year — JPMorgan Chase, Wells Fargo, and U.S. Bancorp — and only JPMorgan Chase had something to brag about.

There are several industrywide trends at play that are holding the banks back. As I mentioned in a previous post, years of near-zero interest rates have been eating into banks’ interest margins, severely limiting the amount of income banks can get out of every loan.

Meanwhile, mortgage banking business has been suffering as most homeowners have already taken advantage of refinancing at record low rates (refinancing hit its peak in 2012, as this Forbes article points out). Top it off with the billions of dollars in legal expenses still being paid for mistakes made during the financial crisis, and there are some serious headwinds to growth.

But for a clearer picture, it may be more valuable to look at each bank for its own merits and faults. So with the trends in mind, here’s a look at how each of the megabanks performed in 2014:

1. JPMorgan Chase
Revenue Growth: -4%
Profit Growth: 21%

High Points in 2014:

  •  JPMC’s Corporate & Investment Bank division held the #1 position in global investment bank fees and its #2 position in M&A deals.
  • Its Commercial Banking division grew its loans by 8%, while its Asset Management division grew its assets under management by 9% as investors poured money into the rising stock market.
  • Profit grew by 21% as the bank incurred $9.2 billion less in noninterest expenses, driven by lower corporate legal expenses and lower compensation costs as it reduced its CCB Mortgage Banking staff.

Low Points in 2014:

  • A 32% decline in mortgage fee income from lower origination volumes pushed revenue lower.
  • Lower interest income also hurt the bank’s top line, mostly as it originated more lower-yielding loans.

2. Bank of America
Revenue Growth: -6%
Profit Growth: -58%

High Point in 2014:

  • BOA boasted 6% growth in investment and brokerage services income, driven by rising assets under management from new business and the rising stock market.

Low Points in 2014:

  • BOA’s interest income from loans and leases fell by 6% as interest margins continued to shrink.
  • Fee-based income from its equity investments, mortgage banking, and securities trading fell.
  • Profit tumbled by 58% as falling revenue and $10.3 billion in additional litigation expenses related to settlement charges with the federal DOJ and FHFA hampered the company’s bottom line.

3. Citigroup 
Revenue Growth: -2%
Profit Growth: -47%

High Points in 2014:

  • Citi’s net interest revenue rose 3% thanks to lower funding costs from deposits.
  • The bank’s Investment Banking division grew advisory and equity underwriting revenue by 7% and 11%, respectively.

Low Points in 2014:

  • Citi’s profit plummeted by 46% after it incurred $3.8 billion in settlement charges related to its legacy residential mortgage-backed securities and collateralized debt obligation (CDO) activities.
  • Its North American Global Consumer Banking revenue fell by $196 million as mortgage origination revenue and interest margins shrunk.

4. Wells Fargo
Revenue Growth: 0.34%
Profit Growth: 5%

High Points in 2014:

  • Strong growth in commercial, retained real estate, and automobile loans helped boost interest income.
  • Trust and investment fee income increased 6% as assets under management grew by 4% to $2.5 trillion.
  • Higher revenue and a $914 million reduction in credit loss provisions from a strengthening loan portfolio helped Wells Fargo post its sixth consecutive year of profit.

Low Point in 2014:

  • The bank’s mortgage banking income declined by 27% as net gains on mortgage sales fell, due to lower origination volumes.

5. U.S. Bancorp
Revenue Growth: 2%
Profit Growth: 0.26%

High Points in 2014:

  • U.S. Bancorp’s fee-related income for treasury management, corporate trust, institutional custody, merchant processing, and freight payment services grew by more than $270 million, greatly offsetting its heavy mortgage-banking losses.
  • The bank boasted 10% growth in its trust and investment fees as it grew its account base and benefited from stock market appreciation.

Low Point in 2014:

  • Mortgage banking revenue declined by 26% as it originated and sold fewer of its mortgage loans held for sale.

So what’s the takeaway for sales and marketing professionals? As long as interest rates remain near historic lows, the banks that generate more revenue from noninterest income sources — through asset management, investment banking, and private banking or wealth management services — will often be better positioned for growth in the current environment. That said, acquisitions have been playing a big role in helping some banks build loan business volume, so pay attention to the ones gobbling up smaller banks as well.

Have you been seeing any trends in the banking industry? Please share your comments below!

More articles by this author:

The Winners and Losers When Interest Rates Rise

Housing Market Boom in 2015? It Depends on What You’re Selling

P2P Lender Helps Fix Small Businesses’ $80 Billion Problem


Before joining Dun & Bradstreet, Christian was a managing editor, senior financial writer and analyst for StreetAuthority.com (a financial newsletter publishing company), and wrote financial articles that were featured on MSN Money, Business Insider, Nasdaq.com, and several other well-known online outlets. Before he was an editor, Christian worked in the commercial banking industry for seven years.

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