A majority of the largest banks in the US reported a decline in total assets following anemic loan growth in the third quarter.
Altogether, the 50 largest US banks and thrifts reported a $74.34 billion decrease in aggregate assets quarter over quarter, with 27 banks reporting sequential declines. By comparison, during the second quarter, the 50 largest US banks and thrifts reported asset declines of $254.50 billion.
The institutions reported a combined $22.953 trillion in assets as of Sept. 30, according to S&P Global Market Intelligence data.
To conduct this analysis, S&P Global Market Intelligence examined the largest US banks and thrifts by assets with a deposits-to-assets ratio of at least 25% or at least $30 billion in deposits as of quarter-end.
To compile a pro forma ranking, S&P Global Market Intelligence calculates pro forma assets after accounting for pending M&A transactions as well as transactions that closed after quarter-end. To be included in pro forma adjustments, the deal value must be over $1 billion or involve assets or deposits in excess of $5 billion. Loan portfolio deals are not included because of a general lack of data on both deal consideration and the impact on total assets.
To view an Excel spreadsheet containing the top 50 US banks and thrifts in the third quarter of 2023, click here.
Combined assets of Big 4 increase
This article is a part of the worldwide bank ranking series.
The world's largest 100 banks, 2023
Asia-Pacific's 50 largest banks by assets, 2023
Latin America and the Caribbean's 50 largest banks by assets, 2023
Europe's 50 largest banks by assets, 2023
The Middle East and Africa's largest 50 banks by assets, 2023
Conversely, aggregate assets at the four largest US banks increased $37.73 billion, or 0.3% in the third quarter, recovering from a $221.99 billion loss in the previous quarter.
JPMorgan Chase & Co., the largest US bank by total assets, reported a 0.8% sequential increase, while Bank of America Corp. and Wells Fargo & Co. reported sequential asset growth of 1.0% and 1.8%, respectively. Citigroup Inc. reported a sequential decline of $55.20 billion in total assets, or 2.3%.
Collectively, the country's top 10 banks reported asset growth of $17.74 billion in the third quarter even though sequential decreases were recorded by Citi, U.S. Bancorp, PNC Financial Services Group Inc., Truist Financial Corp. and TD Group US Holdings LLC.
Western Alliance tops growth list
Of the 38 banks between $50 billion and $500 billion in assets, 17 reported asset growth during the third quarter.
Phoenix-based Western Alliance Bancorp. posted the largest increase in the period as its assets grew by 4.0%, followed by Discover Financial Services and Synchrony Financial, which both logged 3.9% growth. Western Alliance was one of the banks most affected by the banking turmoil following the large bank failures earlier in the year. However, Western Alliance overcame a liquidity crunch and now expects strong loan and deposit growth in 2024.
"We're looking to build a very strong foundational balance sheet here and not be sucked into any of the problems that you saw in the first quarter with a number of banks having their duration mismatch," CEO and President Kenneth Vecchione said during the third-quarter earnings call. "We just want to never go through that again, or if we have to, have it have a minimal effect on us."
Meanwhile, Charles Schwab Corp. logged the highest sequential decrease in total assets at 7.1%. The company disclosed plans to close or downsize certain corporate offices and intends to reduce operating costs primarily through lower headcount and professional services.
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Growth outlook
According to S&P Global Market Intelligence's Q3 US Bank Outlook Survey, bankers are more optimistic about loan growth with 56.9% of those surveyed expecting to see loan growth over the next 12 months, up from 51.4% from the second-quarter survey. However, analysts seem to have a more pragmatic view. "Loan growth should remain slow for the rest of 2023 and into 2024, as banks exercise caution and demand slows," analysts at Jefferies said in a Nov. 17 note.
Meanwhile, tougher regulations such as proposals for stronger capital and long-term debt requirements resulting from the bank failures earlier this year will help drive more mergers among large banks in the US, JPMorgan President and COO Daniel Pinto said during the FT Global Banking Summit.
