Bancorp is primarily a commercial bank, with income from loans and other consumer banking products making up virtually all of its revenue. This can be a positive catalyst in turbulent economies since activities such as trading tend to perform strongly in volatile markets. JPMorgan Chase has also done an excellent job of embracing new technologies, and it has made some key investments in financial technology ( fintech) companies.Īlthough the company's Chase consumer banking operation is one of the largest in the U.S., it is worth noting that JPMorgan Chase has the largest investment banking operation of the companies discussed here. The bank has operations in just about every area of both commercial and investment banking, and it has done a particularly good job of expanding its credit card and auto loan businesses in recent years. JPMorgan Chase is hands-down the most profitable of the big universal banks, and it’s also the largest bank by market capitalization in the U.S. While Bank of America isn't completely immune to economic headwinds, it is in a strong position to weather most storms with a combination of an excellent retail banking operation and an investment bank that can benefit from market volatility. In recent years, the bank increased its loan portfolio at rates well ahead of its peers, and the company has made major improvements in efficiency while building out its online and mobile technology.īank of America's asset quality also is excellent, and, with a relatively high concentration of deposits that don't pay interest, the bank is in a strong position to benefit from rising interest rates in the current Federal Reserve Board rate hike cycle. However, at their core, these are the main ways that banks make their money.īank of America has been one of the most impressive turnaround stories in the post-financial crisis era, even as falling interest rates put pressure on its profitability. For example, many banks offer safe deposit boxes for lease to their customers, and some make money through partnerships with third-party companies. Banks have many other ways to generate revenue. Obviously, these are simplified definitions. Although commercial banks get the bulk of their profits from interest income and investment banks primarily rely on fee income, universal banks enjoy a nice combination of the two.
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