Bank on it: Despite recessionary setbacks, returning economic confidence will revive revenue

Revenue for the Commercial Banking industry finally returned to growth in 2015, after declining every year since 2008. Declining revenue over the first three years of the period is attributable to the effect that the subprime mortgage crisis had on the banking sector. Despite a strong 2015 and 2016, the industry struggled over the five years to 2017, increasing sluggishly; however, profit margins have been on the rise. Significant consolidation in the industry over the past five years has resulted in many unprofitable banks exiting the market. Over the five years to 2022, government regulation and technology-driven competition are forecast to change the business model that commercial banks use...read more.

Industry Statistics & Market Size
Revenue
$579bn
Annual Growth 12-17
0.9%
Forecast Growth 17-22
Profit
Employment
2.0m
Businesses
80,376
What Our Customers Say

Industry Threats & Opportunities

  • Significant industry consolidation over the past five years has resulted in many unprofitable banks exiting the market
  • Government institutions have stepped up and helped back borrowers’ refinanced loans
  • The industry will continue to benefit from government support, despite regulations
  • Industry Report - Industry SWOT Analysis Chapter

    The Commercial Banking industry is in the mature phase of its life cycle, which is characterized by mergers and acquisitions, steady growth, more regulation, a smaller number of banks, market saturation and intense product competition. Over the 10 years to 2022, industry value added (IVA), which measures the industry's contribution to the overall economy, is expected to grow at an annualized rate of 2.9%, compared with annualized growth of 2.0% expected for US GDP.Despite being mature, the industry continues to undergo restructuring in the wake of the subprime mortgage crisis. This factor has allowed some major commercial banks to make large acquisitions, increasing industry consolidation. The...purchase to read more.

    Additional Insights for the Commercial Banking Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Commercial Banking Industry are

  • Having a good reputation
  • Membership of joint marketing/distribution operations
  • Superior financial management and debt management
  • IBISWorld analysts also discuss how external factors such as Prime rate and Aggregate household debt in the Commercial Banking industry impact industry performance..

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    What is the Commercial Banking Industry?

    This industry comprises banks that provide financial services to retail and business clients in the form of commercial, industrial and consumer loans. Banks accept deposits from customers, which are used as sources of funding for loans. Banks in this industry are regulated by the Office of the Comptroller of the Currency.

    Industry Products
  • Depository services and other noninterest-income generating products
  • Real estate loans
  • Loans to individuals excluding credit cards
  • Commercial and industrial loans
  • Credit card loans
  • Industry Activities
  • Receiving deposits from customers
  • Issuing consumer, commercial and industrial loans
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Prime rate
  • Aggregate household debt
  • Corporate profit
  • External competition for the Commercial Banking industry
  • Regulation for the Banking sector

  • Current Performance
  • Return to growth
  • Growing deposits
  • Refinancing opportunities
  • A change in landscape
  • Government regulation
  • Chart: Revenue Growth

  • Industry Outlook
  • Commercial banks gain on savings banks
  • Technology and regulation
  • Table: Commercial Banking Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Commercial Banking Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Agriculture, Forestry, Fishing and Hunting
  • Mining
  • Construction
  • Information
  • Consumers

  • Key Selling Industries
  • Central Banking
  • Commercial Leasing

  • Products & Services
  • Depository services and other noninterest-income generating products
  • Real estate loans
  • Commercial and industrial loans
  • Other
  • Loans to individuals excluding credit cards
  • Credit card loans
  • Chart: Commercial Banking Industry Products and Services Segmentation

  • Demand Determinants
  • Loans

  • Major Markets
  • Corporate clients
  • Retail customers
  • Other clients
  • Chart: Major Market Segmentation for the Commercial Banking Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
    ProfitOther expensesWagesRent and utilities
  • Chart: Cost Structure Benchmarking – Sector vs Commercial Banking

  • Basis of Competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Commercial Banking Industry

  • Industry Globalization
    Wells Fargo & CompanyJPMorgan Chase & Co.Bank of America Corporation
  • Table: Wells Fargo & Company - financial performance
  • Table: JPMorgan Chase & Co. - financial performance
  • Table: Bank of America Corporation - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Commercial Banking Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Commercial Banking Industry
    Includes:
  • Industry Revenue (2008-2022)
  • Industry Gross Product (2008-2022)
  • Establishments (2008-2022)
  • Businesses (2008-2022)
  • Employment (2008-2022)
  • Wages (2008-2022)
  • Prime Rate (2008-2022)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Table: Industry Financial Ratios
    Generation Y
  • The demographic of Americans generally aged 10 to 30.
  • Loan And Lease Loss Provision
  • An amount set aside as an allowance for bad debts (i.e. debts where the customer defaults or where the terms of the loan need to be renegotiated).
  • Loan Default
  • When a customer fails to pay back money received through a loan to the bank.
  • Subprime Mortgage
  • A type of mortgage made out to borrowers with lower credit ratings. Lending institutions often charge higher interest on subprime mortgages to compensate themselves for carrying more risk.
  • Warrant
  • A type of security that entitles the holder to purchase stock in the issuing company at a specified price.
  • Write-Down
  • A deliberate reduction in the value of an asset to reflect its current market value.
  • Why buy this report?

    IBISWorld’s Commercial Banking Industry Research Report contains up-to-date data and analysis, allowing you to identify the strengths and potential weaknesses of major companies in the industry. Build your credibility with clients and prospects by sharing insights into the current and emerging trends driving their industry. Our market research gives you the tools to win new business and keep existing clients.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Commercial Banking:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Commercial Banking market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Commercial Banking, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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