Size Distribution and Market Share of Banks by Assets: A Comparative Overview of the Banking System - US versus Canada, UK and India

 

Introduction

There are currently 4,012 commercial banks in the United States as of the first quarter of 2024. The banking industry can be characterized as a complex ecosystem composed of various types of financial institutions, each serving distinct roles and catering to different customer needs. Among these institutions, community banks, regional banks, and money center banks stand out due to their unique characteristics and operational scopes. Understanding the differences between these types of banks is essential for consumers, businesses, and policymakers alike.

Table 1. Size Distribution of Insured Commercial Banks, First Quarter 2024
Assets		Number of Banks	Share of Banks (%)	Total Assets (in billions)	Share of Assets Held (%)	Total Deposits (in billions)	Share of Deposits Held (%)
Less than $100 million		610	15.2%	38.1	0.17%	32.0	0.18%
$100 million - $1 billion		2,530	63.1%	939.4	4.13%	800.3	4.44%
$1 billion to $10 billion		730	18.2%	2,057.4	9.04%	1,701.6	9.44%
$10 billion to $250 billion		129	3.22%	6,111.4	26.86%	4,939.7	27.40%
Greater than $250 billion		13	0.32%	13,607.7	59.80%	10,555.4	58.55%
Total		4,012	100.0%	22,754.0	100.00%	18,029.0	100%
Source: FDIC Quarterly. First Quarter of 2024

 

Community Banks

Community Banks are the smallest of the three categories, typically holding less than $10 billion in assets. These banks are deeply rooted in their local communities, often serving specific towns or counties. Community banks are usually privately owned and focus on providing traditional banking services such as checking and savings accounts, personal and small business loans, and mortgages. Their loan portfolios tend to be heavily weighted towards consumer and real estate loans, reflecting their commitment to supporting local economic development. Community Banks rely heavily on local deposits for funding, which fosters a strong connection between the bank and its community.

Regional Banks

In contrast, Regional Banks operate on a larger scale, with assets ranging between $10 billion and $100 billion. These banks serve broader geographic areas, often spanning multiple states. Regional Banks may be publicly traded and offer a wider array of services, including personal and business banking, investment products, and sometimes insurance. Their loan portfolios are more diversified, encompassing commercial and industrial loans in addition to consumer loans. Regional Banks utilize a mix of local deposits and borrowed funds for their operations, allowing them to support larger and more varied customer bases.

Money Center Banks

At the top of the hierarchy are Money Center Banks, which are the largest financial institutions with assets exceeding $100 billion. These banks operate on both national and international scales, serving large corporations, governments, and other financial institutions. Money Center Banks are publicly traded and often listed on major stock exchanges. They provide a comprehensive suite of services, including investment banking, wealth management, and global financial services. Their loan portfolios are heavily weighted towards commercial and industrial loans, reflecting their focus on large-scale financial activities. Money center banks rely on a diverse mix of funding sources, including local deposits, borrowed funds, and international funds.

The market share within these categories further highlights their differences. As Table 1. indicates community banks which represent 96.5% of all chartered banks, control only 13.4% of the industry assets. In contrast the 13 largest commercial banks in the United States together hold around 60% of the assets in their industry. 

Size Distribution and Market Share of Banks by Assets: A Comparative Overview of the Banking Industry - US versus Canada, UK, and India

The banking industries in the United States, Canada, UK, and India exhibit distinct characteristics and size distributions, reflecting their unique economic landscapes and regulatory environments. Let’s explore the size distribution of banks in these four countries, highlighting the key players and their market shares

A comparison of the size distribution of the banking system that prevails in the U.S. with regard to other countries such as Canada, UK and India reveal that the United States has one of the most diverse banking sectors in the world. In the U.S., the banking industry is relatively less concentrated compared to some other countries. The five largest banks—JPMorgan Chase, Bank of America, Wells Fargo, Citigroup, and U.S. Bancorp—hold about 44.7% of the total market share by assets. JPMorgan Chase leads with approximately 15.4% of the total assets.

As of the first quarter of 2024, there were 4,012 commercial banks, with total assets amounting to approximately $22.75 trillion. Their size distribution is as follow:

1. JPMorgan Chase: With total assets of $3.053 trillion, JPMorgan Chase is the largest bank in the US
2. Bank of America: The second-largest bank, Bank of America, has total assets of $2.55 trillion.
3. Citigroup: Citigroup holds total assets of $1.70 trillion.
4. Wells Fargo: Wells Fargo has total assets of $1.74 trillion.
5. US Bank Corp: US Bank Corp has total assets of $669.43 billion

As mentioned before, these five banks collectively hold 44.7% of the market share, with numerous regional and community banks (3,870) also contributing to the diverse banking landscape in the US.

In contrast the current numbers of commercial banks in the specified countries are:

• India: There are 48 commercial banks, including 27 public sector banks and 21 private sector banks.
• Canada: The banking sector comprises more than 80 banks, including domestic banks, foreign bank subsidiaries, and branches.
• France: There are around 266 banks operating in France.
• UK: The United Kingdom has approximately 281 banks.

India

India's banking sector is diverse, with a mix of public sector banks, private sector banks, and foreign banks. The largest banks in India include:

1. State Bank of India (SBI): As the largest public sector bank, SBI holds a significant market share.
2. HDFC Bank: The largest private sector bank in India, HDFC Bank, is a major player in the market.
3. ICICI Bank: Another leading private sector bank, ICICI Bank, has a substantial presence.
4. Punjab National Bank (PNB): PNB is one of the largest public sector banks in India.
5. Axis Bank: Axis Bank is a prominent private sector bank with a significant market share.

The Indian banking sector also includes numerous regional rural banks, cooperative banks, and foreign banks, contributing to a diverse and extensive banking network.

Canada

Canada's banking sector is highly concentrated. The five largest banks—Royal Bank of Canada, Toronto-Dominion Bank, Bank of Nova Scotia, Bank of Montreal, and Canadian Imperial Bank of Commerce—dominate the market, holding around 89% of the total banking assets.

The size of those banks is as following:

1. Royal Bank of Canada (RBC): With total assets of approximately CA$1.223 trillion, RBC is the largest bank in Canada.
2. Toronto-Dominion Bank (TD): The second-largest bank, TD, has total assets of around CA$489 billion.
3. Bank of Montreal (BMO): BMO holds total assets of CA$386 billion.
4. Canadian Imperial Bank of Commerce (CIBC): CIBC has total assets of CA$349.2 billion.
5. Bank of Nova Scotia (Scotiabank): Scotiabank's total assets are CA$349 billion.

Again, these five banks collectively dominate the Canadian banking landscape, with a few smaller banks and foreign subsidiaries also operating in the country.

UK

In UK, the banking industry is also quite concentrated, though not as much as in Canada. The largest banks—HSBC, Barclays, Lloyds Banking Group, and NatWest Group—hold a significant portion of the market. HSBC is the largest, with a substantial share of the total assets. The banking sector in UK is characterized by a mix of large, well-established banks and numerous smaller institutions. Their size is as follow:

1. HSBC: As the largest bank in the UK and Europe, HSBC has a market capitalization of over $156 billion.
2. Lloyds Banking Group: Lloyds has a market capitalization exceeding $38 billion.
3. Barclays: Barclays has a market capitalization of almost $30 billion.
4. NatWest: Another major player, NatWest, holds significant assets.
5. Standard Chartered: Although not among the top players in Europe, Standard Chartered is a well-known bank in the UK.

In addition to these major banks, the UK banking sector includes numerous smaller banks, building societies, and foreign-controlled banks, contributing to a diverse and competitive market.