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Banks and Credit Unions Industry Profile Excerpt
| SIC Codes: 6021, 6022, 6035, 6036, 6061, 6062 NAICS Codes: 52211, 52212, 52213 Page Length: 10-12 Last Quarterly Update: 10/20/2008 View Sample Industry Profile |
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The US banking system includes about 8,000 commercial banks, 1,400 savings banks, and 10,000 credit unions, with combined annual revenue of more than $600 billion. Large commercial banks include Bank of America, JPMorgan Chase, Citibank, and Wachovia. Washington Mutual and Navy Federal Credit Union are among the largest savings banks and credit unions, respectively. The industry is concentrated, except in the credit union segment: the 50 largest banks hold more than 60 percent of the market. The credit union segment is highly fragmented: commercial banks account for about 80 percent of industry revenue; savings banks, 14 percent; and credit unions, 6 percent.
COMPETITIVE LANDSCAPE
Demand for banking services is closely tied to economic activity and the level of interest rates. The profitability of individual banks depends on marketing skills, efficient operations, and good risk management. Large economies of scale exist in some segments of the industry, which has encouraged industry consolidation. Smaller banks can compete successfully in segments where customer service or knowledge of the local market is more important. The industry is capital-intensive and highly automated: annual revenue per employee is close to $300,000.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major products are bank loans, account services, brokerage services, credit card and leasing services, trust management, and investment services. Bank loans provide 55 percent of industry revenue, account services provide 10 percent, the other major services each provide less than 5 percent. Following the Gramm-Leach-Bliley Act of 1999, some banks ...
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