Based on the latest available annual data, JPMorgan is the US’s largest bank by Tier 1 capital and its best performing too. The bank is the best performing in terms of liquidity, as expressed by the combination of its loans-to-assets and loans-to-deposits ratios and which also takes into consideration annual changes.
The bank leads in the operational efficiency table, which looks at the cost-to-income ratio and its annual change; it is in the top spot in the return on risk table, which is based on banks’ return on risk-weighted assets ratios; and on the profitability table, which considers return on assets, return on equity, profit margin and asset utilisation ratios. As for all others, both return on risk and profitability indicators include annual changes.
Bank of America, Wells Fargo, Citigroup and Goldman Sachs follow JPMorgan in Tier 1 capital size, but it is the relatively smaller banks that are on the heels of the leader in the best-performing group, including Capital One Financial Corporation, PNC Financial Service Group and US Bancorp.
Truist Bank leads by resilience indicators, which combine the allowance for loan losses on total loans ratio, non-performing loans ratio and the impairment charges to total operating income ratio, and the changes to those values compared to the previous year.
Truist Bank is the result of the $66bn merger between SunTrust and BB&T, which completed at the end of 2019, and it is now the ninth largest bank in the US by Tier 1 capital. The new bank’s ratios are compared to the 2018 figures for BB&T, which technically, as far as banking supervisors are concerned, is the surviving entity to which the additional operations have been added. For this reason, it is not surprising to see Truist Bank also lead in the growth table, where growth is measured as the combination of annual growth in assets, loans, deposits and operating income. In this table, JPMorgan follows Truist Bank at a considerable distance.
Capital One, which is seventh by Tier 1 capital in the US, leads the tables for soundness and leverage. The former is based on capital assets ratios and their annual change, while the latter looks at total liabilities to total assets ratios and at their variation from the previous year.
While New York remains a leading global financial centre, the US’s best-performing banks are scattered around the country. Of the top 10 names, four are in New York; two in Charlotte (North Carolina); and one each in McLean (Virginia), Pittsburgh (Pennsylvania), Minneapolis (Minnesota), and San Francisco (California).
