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, Wells Fargo, and Navy Federal Credit Union (all based in the US), as well as Banco Santander (Spain), HSBC Holdings (UK), China Construction Bank, and Industrial and Commercial Bank of China.

Worldwide, the banking industry generates revenue of about $4.2 trillion annually, according to consulting firm McKinsey & Company. North America accounts for nearly 30% of global revenue, followed by Western Europe and China (20% each). China -- home to eight of the world's 25 largest banks -- represents a huge growth opportunity for banks, as does the massive unbanked population in India.

The US banking industry includes about 4,970 commercial banks, 770 savings banks, and 5,815 credit unions with combined annual revenue of about $520 billion. Commercial banks have about $16 trillion in assets, savings banks $1.2 trillion, and credit unions $1.4 trillion.

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 ...