Introduction
US major banks, especially giants like JPMorgan Chase, have outperformed European banks in recent years in terms of market valuation and profitability. This trend is evident in several key aspects.
Market Valuation
JPMorgan Chase currently leads the list of the largest banks in the world by market capitalization, with an impressive market value of approximately 637 billion US dollars (as of March 2025). This dominance of US banks among the top 10 largest banks globally is noteworthy, with the British HSBC being the only European bank in this ranking.
Profitability Comparison
The ten largest US banks reported a net profit of approximately 180 billion euros last year, reflecting an increase of nearly 25% compared to the previous year. In contrast, the ten largest European banks collectively achieved about 85 billion euros, representing a decline of 13% compared to their record year in 2023.
Furthermore, US banks exhibit a significantly higher return on equity, which is estimated at 12.2% for 2024, while European banks attain around 9%.
Reasons for the Success of US Banks
The success story of US banks can be attributed to several factors: a growing number of IPOs, increased mandates for mergers and acquisitions, rising interest income, and enhanced earnings in wealth management.
Impact on Investors and Savers
Investors in the German-speaking region may increasingly invest in US banks due to their higher profitability. Furthermore, European banks may be perceived as riskier relative to their weakness, which could influence investment decisions.
Overall, it is evident that US major banks have surpassed European banks in terms of market valuation and profitability, presenting important considerations for the investment strategies of investors in the German-speaking region.