The main function of a bank or banking in general, is financial intermediation.
That is, take money from people or excess entities, known as investors or savers and place it in the hands of people or deficit agents known as borrowers, under different financial instruments and in exchange for a “spread” or differential by intermediation that is given by the difference between active and passive interest rates.
The term banking, is usually synonymous with the banking system. It can be seen as the set of banks or financial institutions of a country or region that provide financial services.
When a bank is not only limited to savings and loans, but offers multiple savings, investment, trusts, loans, insurance, among others. That is, when a bank offers universality of financial products, it is known as Universal Bank.
Universal banking, should not be confused with the term of international banking, which is one especially aimed at attracting foreign capital.
The size of a bank, is measured through different optics. They range from their total assets, the size of their loan portfolio, the size of their investment portfolio, the number of agencies, their profitability margins and even their arrears or percentage of overdue and immobilized loans.
However, to determine the position of a bank within the national or international banking system, the methodology with the greatest acceptance is the CAMEL method. For its acronym in English will be a compendium of indicators such as: C apital, A ctivos, Management ( M anagement), Profitability ( E arnings) and Liquidez.
According to a report offered by Deutsche Bank, in 2017, the best indicators to measure the position of a bank within the national and international financial system, is through indicators such as: Profitability (ROE & ROA), its social capital, the total of your assets, market capitalization, the value of your risk-weighted assets or RWA, your net income and number of agencies.
Under this conception, entities such as JP Morgan Chase, Citigroup, Bank of America, Wells Fargo and Goldman Sachs, are five major American banks that top the lists.
The best banks in the United States
- JPMorgan Chase & CoFor total assets and level of market capitalization, JPMorgan Chase is by far the largest bank in the United States in recent years.
JPMorgan Chase, was born in the year 2000 after the merger of two large companies with the largest history in banks in the United States, the Chase Manhattan Corporation and the JP Morgan & Co.
Only the Chase Manhattan, has its origin Chase National Bank founded in 1877, being the oldest in the United States and JPMorgan for its part, has origins in 1895, from the Drexel Morgan Company.
JPMorgan Chase, at the end of 2017, had the exorbitant sum of USD 2,789 billion in the portfolio of assets under its administration and is the second largest bank in the world in market capitalization.
If you want more information about this colossus of finances worldwide, we invite you to review your 2017 management report.
- Bank of AmericaBank of America Corporation, is the second largest bank in the United States, measured in size of its asset portfolio and capitalization level. Based in Charlotte, North Carolina.
The origins of Bank of America date back to 1904. Originally with the name of Bank of Italy. In the middle of the 2008 financial crisis, it acquired the investment bank Merrill Lynch, positioning it and making it one of the best institutions in investment asset management.
Bank of America during the last five years, has concentrated about 12 percent of all deposits in the United States.
The portfolio of assets of Bank of America amounts to USD 2,285 billion at the end of 2017. It has a presence in all fifty states of the union and in forty other countries.
- Wells FargoWells Fargo & Company, another banking market giant in the United States, is a multinational financial institution headquartered in San Francisco.
Wells Fargo, is another great one with history whose beginnings date from 1852.
If we talk about market capitalization Wells Fargo would become if not the second, at least the third. However, it is the third largest asset portfolio. Its assets under management are USD 1,935 Billion. At the end of 2017.
In 2016 Wells Fargo, was involved in a scandal for the discovery of nearly two million accounts never authorized by its customers, so it received fines in the order of USD 185 million. Today already seems to be a story overcome.
- Citigroup Inc.Citigroup Inc or just Citi. It is an investment and financial services bank, with headquarters in New York. It happens to be the big room in the list of the best banks in the United States.
Citigroup was born from Citicorp, another pioneer in the American financial market that was founded from the City Bank of New York in 1812.
Citigroup was the first American bank to combine insurance management with banking. If we talk about presence outside the United States, we can say that it is the best positioned on the list. Citigroup has some two hundred million customers worldwide.
It operates in 160 countries, has more than two hundred thousand employees. The total portfolio of assets under management at the last closing was USD 1,889 billion.
- Goldman Sachs GroupThe fifth best positioned in the rankings of American banks is the Goldman Sachs. Headquartered in Manhattan, New York. It was founded in 1869 and since 1896 it was listed on the NY Stock Exchange.
Goldman Sachs, is listed as an investment and financial services bank, for its outstanding investment, asset management and securities subscription service.
Goldaman Sachs, was one of the banks most affected in the financial crisis of a decade ago to the point that it should have received some USD 10,000 million in financial aid from the federal government.
Having overcome the crisis in a few years, and its portfolio of assets at the last close reaches USD 917 billion, according to the site specialized in finance bankrate.com, ranking 5th.