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‘Goliath’ JPMorgan Has 18% of All US Banking Revenue, Report Says

JPMorgan Chase, New York City

JPMorgan Chase is ending 2023 as the leading figure in the U.S. banking sector.

The company’s banking operation earned $38.9 billion in profits for the first nine months of the year, or about 18% of the industry total, according to calculations published Wednesday (Dec. 27) by the Financial Times (FT).

Those earnings exceed those of rivals Citigroup and Bank of America combined, the report said. If the bank manages to keep this momentum up for the full year, it will have commanded its highest share of industry profits since 2009.

“JPMorgan is the Goliath of Goliaths,” Wells Fargo analyst Mike Mayo told the FT.

The report notes that the data is not comprehensive, covering profits from subsidiaries with Federal Deposit Insurance Corporation (FDIC)-insured deposits, as well as JPMorgan’s commercial and retail banking earnings, and portions of its investment banking and trading division, something not all of its competitors do.

One of the things that gave the bank an edge was its purchase of First Republic after that California-based lender failed in March. The FT compared it to JPMorgan’s acquisition of companies like Bear Stearns and Washington Mutual during the 2008 financial crisis.

“JPMorgan Chase has been very effective at being in the right place at the right time when distressed sales were available,” said Eric Rosengren, former president of the Boston Fed.

Following the acquisition of First Republic, the FT said, JPMorgan’s quarterly earnings showed the bank earning nearly 20 cents out of every $1 in profit reported by American banks, compared to 12 cents in the same quarter in 2022.

Earlier this month, Marianne Lake, the bank’s co-head of consumer and community banking, said JPMorgan had retained 90% of First Republic’s clients.

“A lot of the deposits came down rationally and over a very short period of time, but we still have relationships,” Lake said at a recent industry conference. “So we still have a lot of opportunities to talk to them about bringing more of their wallet back to the company.”

And in a year that has seen the banking sector cut more than 61,000 jobs — with about half those cuts coming from Wall Street giants — JPMorgan has fared better than its rivals. The bank laid off 1,000 workers this year, a figure that’s just 20% of the level of cuts at Citi.