Following a profit squeeze last year, the US banks benefitted from a more resilient economy than expected.

It has been a year of recovery for US banks, with significantly increased profits and profitability for many in 2021. The aggregate return on assets for US banks now stands at 1.27% compared to 0.72% last year, and aggregate return on equity at 13.57%, up from 7.42%.

Just nine out of the 186 US banks in the Top 1000 ranking saw smaller pre-tax profits this year than last, and only one of these – PNC Financial Services Group – is one of the US’s 10 largest banks. However, much of this boost in profits is due to the reduction or reversal in credit impairment charges.

Overall, US banks’ aggregate Tier 1 capital grew by 4.7%, just below overall growth of 5.4% across the Top 1000 banks.

It was also a year of change in our best-performing banks table. The Banker’s best-performing methodology scores firms on their performance across eight indicators, providing an overall score and eight individual scores in areas such as growth and profitability.

Out of the 10 largest US banks, Capital One Financial Corporation has come out on top, outperforming its peers in profitability, asset quality, return on risk, soundness and leverage. Ranked 45 in the world by Tier 1 capital, Capital One increased its pre-tax profits by 393.9%, to $15.80bn. It has the highest return on assets among this cohort, of 2.87%, and the highest return on capital, of 25.63%, as well as the highest capital to assets ratio, which is a main barometer of soundness.

Goldman Sachs came in second for overall performance. It had a strong year, with its pre-tax profits increasing by 116% year-on-year. It recorded a 15.1% rise in Tier 1 capital and a 25.9% increase assets, more than any of its peers in the top 10 cohort. Goldman Sachs topped the table in growth and operational efficiency, which analyses cost-to-income ratio performance and year-on-year changes to it, as well as scoring highly in liquidity and return on risk.

Wells Fargo improved significantly, moving from last place in the 2021 table to third spot this year. It performed well in the leverage and operational efficiency categories. Morgan Stanley, which placed first last year, dropped down to fifth in the 2022 table, with its highest ranking in the growth category.

Truist Bank, formed in December 2019 following the merger of BB&T and SunTrust, fell from second place in 2021 to ninth place this year. Likewise, PNC Financial, which focuses on retail customers and small and medium-sized enterprises, tumbled from third position to 10th, despite ranking second in the growth category.

The US’s three largest banks by Tier 1 capital, JPMorgan, Bank of America (BofA) and Citigroup came in fourth, seventh and eighth place, respectively, for overall performance. JPMorgan topped the table in the liquidity category, with BofA was close on its heels. Citi fared best in asset quality.

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