The four largest U.S. banks—JPMorgan Chase (JPM), Bank of America (BAC), Citigroup (C), and Wells Fargo (WFC)—are on track to claim their highest share of banking sector profits in nearly a decade, solidifying their dominant position in the industry. These institutions accounted for 44% of the sector’s earnings in the first nine months of 2024, highlighting their growing influence in a highly competitive market.
The Power of Big Banks
According to Financial Times data based on BankRegData figures, JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo collectively generated $88 billion in profits between January and September 2024. This 44% share is the highest recorded since 2015 and stands out in a sector encompassing over 4,000 banks nationwide.
Including US Bank, PNC, and Truist in the analysis, the seven largest banks by deposits captured 56% of total sector profits during the same period, a significant rise from 48% in the previous year. This concentration signals that large banks continue to strengthen their leadership over smaller institutions.
What Drives Big Banks’ Dominance?
The dominance of these banks can be partly attributed to their ability to absorb high regulatory, technological, marketing, and operational costs. The capacity to spread these expenses across a broader customer base gives them a significant competitive edge. Additionally, their scale allows for investments in technology and brand recognition levels that smaller banks simply cannot match.
Chris Kotowski, a banking analyst at Oppenheimer, highlights this advantage: “When you’re far below the largest banks, it’s very hard to make the necessary investments and achieve the same brand recognition.”
The Impact of U.S. Banking Fragmentation
The U.S. banking system remains notably fragmented, a situation rooted in historic restrictions on interstate banking, which were not lifted until the 1980s. This fragmentation has hindered industry consolidation, but the increasing dominance of major banks has renewed calls for greater integration among smaller institutions to better compete.
While banking mergers and acquisitions have slowed in recent years, some experts anticipate that the next Trump administration could adopt a more permissive policy to spur consolidation. Bob Diamond, former Barclays CEO, recently predicted that the number of U.S. banks could shrink to less than half within the next three years.
Rising Competition from Non-Banking Entities
Meanwhile, the primary competitors of big banks are no longer just smaller banks but also a growing number of non-banking entities. Private credit firms like Apollo, Affirm, and Rocket Mortgage are gaining ground as lenders to businesses, homebuyers, and consumers. In the mortgage market, these entities now manage more than half of U.S. home loans, compared to just 11% in 2011.
In his annual letter to shareholders, JPMorgan CEO Jamie Dimon warned that even tech giants like Apple are effectively acting as banks by offering money storage, transfer, and lending services.
Analysis of the Wall Street Titans
 | JPMorgan Chase (JPM) | Bank of America (BAC) | Citigroup (C) | Wells Fargo (WFC) |
|---|---|---|---|---|
| Price | 242.3 | 44.3 | 71 | 71.5 |
| Maket Cap. | 682.19B | 340.52B | 134.28B | 238.36B |
| 52W H | 254.3 | 47.8 | 73.3 | 78.1 |
| 52W L | 161.4 | 30.4 | 48.6 | 44.9 |
| Net Margin | 32.99% | 26.74% | 16.15% | 23.74% |
| PE | 13.47 | 16.08 | 20.23 | 14.88 |
| PB | 2.10 | 1.25 | 0.70 | 1.45 |
| PS | 3.94 | 3.46 | 1.70 | 2.89 |
| Div. Yield | 1.90% | 2.21% | 3.03% | 2.03% |
| Intrinsic Value | 250.4 | 51.4 | 80.8 | 72.1 |
| Margin of Safety | 3.34% | 16.02% | 13.80% | 0.83% |
Conclusion
The increasing concentration of profits among America’s top banks reflects a transforming industry where size and scale are more critical than ever. While large banks solidify their dominance, smaller institutions face mounting pressures to adapt or merge. Simultaneously, competition from non-banking entities introduces new challenges and opportunities in a sector that is reshaping its future.
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