US Banks Consolidate Market Share, Capturing Nearly Half of Industry Profits in 2024

​The four largest US banks - JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo - are on track to capture their biggest share of the US banking industry's profits in nearly a decade. For the first nine months of 2024, these banks reported approximately $88 billion in combined profits, making up 44% of the total profits in the sector. This marks the highest share since 2015, despite competition from over 4,000 other banks across the country.

Together with other large banks like US Bank, PNC, and Truist, the seven largest institutions now account for almost 56% of all banking profits, up from 48% during the same period last year. The figures come from earnings reported to the Federal Deposit Insurance Corporation (FDIC), reflecting profits from US banking entities.

This growing concentration of profits among the biggest banks highlights the increasing dominance of large financial institutions, which are able to leverage their size to better absorb costs related to regulation, technology, and operations. "Once you get much below the biggest banks, then it does become really hard to make the necessary investments and have the same name recognition," said Chris Kotowski, a banking analyst at Oppenheimer.

The US banking system, which remains fragmented due to historical barriers on interstate banking, has led to calls for further consolidation. While dealmaking has slowed in recent years, there are hopes that a more permissive regulatory environment could spur future mergers. Bob Diamond, former Barclays head and current investment firm CEO, speculated that the number of US banks could be cut by more than half in the next three years.

However, the biggest banks now face increasing competition from non-bank financial institutions, such as private credit firms and tech giants like Apple, which are offering bank-like services to consumers and corporations alike.