In the 1930s, American banks lent money to investors to buy stocks. At one time very lucrative, this model failed when stocks collapsed with the crash of 1929 and the banks were no longer repaid. Initially a financial crisis, this led to a complete rethink of the system, with the real economy suffering the consequences. The United States then enacted the Glass-Steagall Act, aimed at separating investment banking from commercial banking to protect the economy from the speculative excesses of the financial markets.

Over the decades, however, this separation was gradually called into question and eventually abolished, allowing the big banks to become systemic entities. Today, these institutions offer a full range of financial services, combining lending, deposit-taking, investment advisory, trading and brokerage functions (etc.) under a single umbrella. But despite this, each bank maintains a distinct specialization linked to its history: some focus primarily on investment banking services, while others emphasize retail banking.

Business-oriented banks

Bank of America

  • Revenues: $101.7 billion
  • Number of employees: 214,000
  • Headquarters: Charlotte, North Carolina
  • Geographical distribution of revenues: Americas 86.8% / Asia 5% / Europe, Middle East and Africa (EMEA) 6.5% / Latin America and Caribbean Islands 1.7%

Bank of America derives almost half of its revenues from traditional retail banking activities, such as deposit management, lending and credit card services. A quarter of its sales (or net banking income for the industry equivalent) come from corporate solutions (loans, working capital and cash management, consulting, underwriting services) and a fifth from wealth management for high-net-worth clients (over $250,000 in assets), notably through Merrill Lynch, a subsidiary acquired in 2008. On the financial markets, the bank is very active in trading and research for institutional clients, as well as in investor services (market maker, clearing house, etc.). Other activities include risk management, foreign exchange and costs not allocated to other segments.

Percentage breakdown of revenues :

  • Retail banking 42.4%
  • Wealth management and investments 21.3%
  • Global banking 25%
  • Global markets 19.7%
  • Other activities -8.4% (mainly costs, classified in a separate category)

Morgan Stanley

  • Capitalization: $182 billion
  • Revenues: $58.6 billion
  • Number of employees: 80,000
  • Head office: New York
  • Geographical breakdown of revenues: Americas 76.9% / Asia 11.9% / Europe, Middle East and Africa (EMEA) 11.2

Morgan Stanley generates the bulk of its revenues from its wealth management and institutional securities activities, offering advisory, trading, mergers and acquisitions (M&A), financial product issuance and loan syndication services. The bank also has a sizeable segment dedicated to asset management.

Percentage breakdown of revenues :

  • Asset management 48%
  • Institutional securities 42.1%
  • asset management 9.8%

Goldman Sachs

  • Capitalization: $173 billion
  • Revenues: $51.8 billion
  • Number of employees: 46,500
  • Headquarters: New York
  • Geographical breakdown of revenues: Americas 64% / EMEA 25% / Asia 11

Goldman Sachs generates the majority of its revenues from its Global Banking & Markets activities, which include advisory services, trading, financial product issuance and mergers & acquisitions (M&A). The bank also offers asset and wealth management services, which account for around a third of revenues, as well as credit card offerings and cash management services.

Percentage breakdown of revenues :

  • Corporate and Investment Banking 65
  • Asset and wealth management 30%
  • Other solutions 5%

Banks that are both investment and commercial banks

JP Morgan Chase

  • Capitalization: $625 billion
  • Revenues: $174 billion
  • Number of employees: 316,000
  • Headquarters: New York
  • Geographical breakdown of revenues: United States 78% / Europe, Middle East and Africa (EMEA) 13.2% / Asia-Pacific 6.7% / Latin America and Caribbean Islands 2.1

JPMorgan Chase generates almost half of its net banking income in retail banking for individuals and small businesses. Corporate and investment banking activities account for a third of revenues, with services in strategy consulting, capital raising and risk management. Commercial banking, aimed at medium-sized and large companies, contributes 15% of revenues, while asset and wealth management is aimed at wealthy customers.

Percentage breakdown of revenues :

  • Retail banking and community services 45
  • Corporate and investment banking 30%
  • Commercial banking for companies 15%
  • Asset management and wealth management 10%

Wells Fargo

  • Capitalization: $211 billion
  • Revenues: $82.3 billion
  • Number of employees: 220,000
  • Headquarters: San Francisco, California
  • Geographical breakdown of revenues: undisclosed

Wells Fargo focuses primarily on retail and commercial banking. One-fifth of its sales are related to business and investment (M&A, financing structures, debt, consulting, etc.). Wealth management for high-net-worth clients completes its portfolio of services.

Percentage breakdown of revenues :

  • Retail banking 44.5
  • Commercial banking for corporate clients 16
  • Corporate and investment banking 23
  • Wealth management 16.5

Citigroup

  • Capitalization: $121 billion
  • Revenues: $80.8 billion
  • Number of employees: 229,000
  • Headquarters: New York
  • Geographical breakdown of revenues: North America 49.5% / International 50.5

Citigroup generates a quarter of its revenues from retail banking and as much from capital markets activities, including trading, research, risk management, brokerage and securities settlement. It also offers treasury solutions and securities services for corporates, utilities and financial institutions. Investment banking activities, supporting capital raising and financing related to equity and debt markets, as well as advisory services, account for less than 10%, on a par with wealth management. Other activities, including subsidiaries in countries such as Mexico and parts of Asia, as well as divestments, make up almost 15% of the total.

Percentage breakdown of revenues :

  • Retail Banking 24.5
  • Markets 24% Sales
  • Services 23% of revenues
  • Investment banking 6%
  • Wealth Management 9% Other
  • Other (notably activities in Mexico and certain parts of Asia, and divestments) 14

Charles Schwab, the brokerage institution

Charles Schwab

  • Capitalization: $132 billion
  • Revenues: $18.8 billion
  • Number of employees: 32,500
  • Headquarters: Westlake, Texas
  • Geographical breakdown of revenues: undisclosed

Charles Schwab distinguishes itself primarily in the investor services segment, with a strong presence in brokerage, reinforced by the acquisition of TD Ameritrade for $26 billion in 2019. The company is also involved in investment consulting and retirement planning services. A fifth of its revenues come from investment advisor services, with business, technology and operations consulting to help financial advisors develop and manage their practices effectively.

Percentage breakdown of revenues :

  • Investor Services 78%
  • Advisor Services 22