Banks & Credit Unions Industry Profile

Companies in this industry accept deposits and make commercial, industrial, and consumer loans. Major companies include Bank of America, Citibank, JPMorgan Chase, Navy Federal Credit Union, and Wells Fargo (all based in the US), as well as Banco Santander (Spain), China Construction Bank and Industrial and Commercial Bank of China (both based in China), and HSBC Holdings (UK).

Global banking revenue generated about $7 trillion in revenue, with retail banking and corporate and commercial banking accounting for a large part of global revenues, according to McKinsey & Company.

The combined industry includes about 110,000 establishments with an annual average revenue of $530 billion.

COMPETITIVE LANDSCAPE

Demand for banking services is closely tied to economic activity and the level of interest rates. The profitability of individual banks depends on marketing skills, efficient operations, and good risk management. Large economies of scale exist in some segments of the industry, which has encouraged industry consolidation. While smaller banks and credit unions can compete successfully in segments where customer service or knowledge of the local market is more important, big banks are becoming increasingly dominant.

The US commercial banking segment is concentrated: the 50 largest firms generate about 70% of revenue.

A decade after the financial crisis of the late-2000s finds the global banking industry on firmer footing, although the recovery hasn't been uniform across all regions. Assets at the largest US banks reached about $12.95 trillion in ...