The US banking system and banks are regulated by the Federal and state governments. The Federal Bank and other regulatory authorities like the SEC make new and stricter regulations for Banks in the wake of the financial crisis. As per FDIC Statistics, there are 5,542 FDIC insured institutions which include 4,833 commercial banks and 709 savings banks as of 30 June 2018.
Structure of Banks in the USA
Banks are categorized as per below:
- Savings banks are for-profit businesses. Savings banks in the USA take deposits from the account holders and the money thus collected is invested by the Bank. The account holders get an interest rate out of the return generated from the investments.
- Credit unions are non-profit cooperative financial institutions. Credit Unions are owned and controlled by people generally into a similar living, working or something that is common amongst the members. These unions work to empower the community and not to earn a profit. The US has the highest number of credit unions in the world.
- Commercial banks mainly serve businesses. These banks offer services such as accepting deposits, granting business loans, and offering basic investment products.
- Savings and loan banks are into retail banking services where the depositors earn interest on their deposits. The Banks use the deposited money to provide loans like auto loans, home loans, etc.
- Investment banks are companies that give investment advice. They buy and sell stocks and bonds. Depending on the bank, they may not accept deposits or make loans, and not all are FDIC insured.
List of Top 10 Banks in the USA
As per Federal Reserve Statistics, the top 10 large Banks in the USA are given below. The assets are as of 31st March 2018.
#1. JPMorgan-Chase Bank
JP Morgan Chase Bank is the top bank in the USA, headquartered in New York has more than 2 trillion dollars of assets. The Bank was formed by the merger of two old banks, JP Morgan and Company and Chase Manhattan Corporation. The Bank uses JP Morgan’s name for Investment banking and private wealth management functions whereas Chase is used to providing retail and commercial banking services.
John Pierpont Morgan was the founder of JP Morgan Bank in the 19th century whereas an American politician, Aaron Burr was the founder of Chase Manhattan. The Bank has more than 1,60,000 employees worldwide which provides services related to investment banking, asset management, private banking, private wealth management, treasury and security services, retail banking services, credit card services, and commercial banking.
#2. Bank of America
Bank of America was started as a small institution by the name Bank of Italy to serve the immigrants in the US in 1904. Years later after expansion and mergers, the Bank now called Bank of America is one of the biggest banks in the USA headquartered in Charlotte, North Carolina. Although, the Bank may not be the largest in the US it does own the largest wealth management Company, Merrill Lynch.
Bank of America through its banking and non-banking subsidiaries and close to 4500 branches in the US provides a range of financial services. The services include consumer banking, Global Wealth and Investment Management, Global Banking.
#3. Wells Fargo
Founded 166 years ago by Henry Wells and William Fargo in March 1852, Wells Fargo is the second top bank by market cap in the world and third-largest in the US by the number of assets it holds. The bank is headquartered in San Francisco and employs more than 260,000 individuals. This bank holds the distinction of being the very first bank to receive a charter from the United States government which it received from the First National Bank of Philadelphia after the acquisition of Wachovia in 2009.
It provides the number of products and services under three different segments Community Banking, Wholesale Banking and Wealth, Brokerage and Retirement. The Banks products include asset management, commercial banking, brokerage services, credit cards, commodities, corporate banking, consumer banking, consumer finance, finance and insurance, foreign currency exchange, equities trading, foreign exchange trading, insurance, investment banking, futures, and options trading, money market trading, private banking, mortgage loans, retail banking, prime brokerage, risk management, underwriting and wealth management.
#4. Citigroup Inc.
The fourth-largest financial institution in the United States, Citigroup Inc. was formed by the merger of Citicorp and Travelers Group in 1998, however, Travelers were spun off in 2002. Headquartered in New York City, the group is a leader in the credit card industry and ATMs. It provides financial products and services to consumers, corporations, governments, and institutions worldwide. It operates through its subsidiaries, Citicorp and Citi Holdings.
#5. US Bancorp/U.S. Bank
US Bancorp is headquartered in Minneapolis and was found after the merger of major regional banks from the west and Midwest. US Bancorp is the holding company of the 5th largest bank in the United States – US Bank. Its subsidiary US Bank provides banking and financial services to clients. This bank also has credit card services, merchant and ATM processing, mortgage banking, brokerage services, and leasing.
US Bancorp also owns Elavor the credit card transaction processing Company along with other subsidiaries like Elan Financial Services and Syncada.
#6. PNC Bank NA/PNC Financial Services Group
PNC is based in Pittsburgh formed after the merger of two Pennsylvania banks Pittsburgh National Corporation and Providence National Corporation after which they named the merged entity simply as PNC.
The group has many segments which include – retail banking, corporate and institutional banking, asset management group and residential mortgage banking, etc.
#7. Bank of New York Mellon
The Bank of New York Mellon was founded by the first Secretary of Treasury – Alexander Hamilton in 1784. It was formed after the merger of T. Mellon and Pittsburgh based financial institution – Sons. It is the oldest banking corporation in the United States and the world’s largest custodian bank to other financial institutions. The Bank through its subsidiary BNY Mellon Wealth Management provides investment services as well.
#8. TD Bank, TD Group US Holdings LLC
TD Group US Holdings is headquartered in New Jersey and a subsidiary of the Canadian Bank based in Toronto. The Bank provides banking, insurance, brokerage, and investment banking services and caters to clients mostly in the US and Canada.
#9. Capital One/Capital One Financial Corporation
Virginia based Capital One Financial Corporation is primarily into retail banking. It provides credit cards, auto loans, home loans, and savings services.
#10. State Street Corporation
Boston based State Street Corporation is a Bank holding company that provides various services through its subsidiaries. It is one of the largest Asset Management Companies in the world. It also provides investment services to clients along with securities lending and trading.
This has been a guide to the list of top 10 best banks in the USA. Here we provide an overview of best banks in the United States of America along with there structure and industry dynamics. If you are looking forward to making a career in Banking, then you can check out some of the awesome resources –