NEW YORK–The nation’s biggest banks continue to grab an even larger share of Americans’ deposits. Since the 2008 financial crisis, the three largest U.S. banks by assets have added more than $2.4 trillion in domestic deposits–double total deposits in credit unions–according to a Wall Street Journal analysis of regulatory data.
That amount exceeds what the top eight banks had in such deposits combined in 2007, the Journal found.
The big three–JPMorgan Chase, Bank of America and Wells Fargo, have all increased their market dominance in part due to deals done during the crisis. At the end of 2007, the three banks held 20% of the country’s deposits. By the end of 2017, they held 32%, or $3.8 trillion, the Journal reported.
According to CUNA Mutual’s Trends Report, America’s credit unions added 4.7 million new members during 2017 to bring total membership to 113.9 million. Total savings at federally insured credit unions was $1.185 trillion.
“It marks a new phase of consolidation in the banking industry, one driven first by the acquisitions and then by customers’ attraction to the digital tools and ubiquitous locations of the biggest banks,” the Journal reported. “Last year, about 45% of new checking accounts were opened at the three national banks, even though those lenders had only 24% of U.S. branches, according to research by consulting firm Novantas. Regional and community banks, by contrast, had 76% of branches but got only 48% of new accounts, the firm said.”
The Journal quoted a Novantas analyst as observing that regardless of how many banking transactions are now done online or through smartphones, consumers are picking national banks because of their well-known brands and the perception that their technology is better, Frisbie said.
“The biggest banks are winning,” the Journal quoted Tom Brown, CEO of hedge fund Second Curve Capital LLC, as saying. “Small banks should be very concerned.”
The big banks are also expanding their retail networks, with Bank of America announcing plans to open branches in Denver, Indianapolis and three other cities, and JPMorgan announcing it will be entering 15 to 20 new markets.