U.S. lost 45% of Commercial Banks since 2000, but Net Income grows by 207%
Data acquired by Finbold.com reveals that the total number of Commercial Banks in the US has dropped by 45.65%. The drop has been registered between 2000 and 2020. The data shows that Commercial Banks have closed at a rate of 3.15% yearly average.
Financial crisis accelerates closure of Commercial Banks
In 2000, the number of Commercial Banks was 8,315. As of 2020, the total number of banks is projected to stand at 4,376. Between 2010 and 2020, the number of Commercial Banks has dropped by about 32.87%
Finbold.com researchers commented on the declining number of Commercial Bank in the US following the financial crisis. According to the report:
“The crisis also led to a wave of mergers and bank acquisitions. Commercial Banks that recovered quickly expanded their footprints by acquiring struggling competitors. On the other hand, struggling Commercial Banks sought mergers as a rescue plan. The crisis offered an opportunity to reduce cost through the shuttering of inefficient office locations. The crisis further forced most banks to close following earning pressure from low-interest rates and rising regulatory costs. Overall, the crisis effects continue to haunt the banking sector to date.”
The research also overviewed the Net Income of the U.S. Commercial Banks between 2000 and 2019. Despite the decline in Commercial Banks, their cumulative revenue has surged by a whopping 207.38%.
In 2000, the Net Income was $70.79 billion, while in 2019, the figure stood at $217.6 billion. The lowest Net Income was recorded in 2009 at -$11.61 billion. The record drop in revenue was registered in the wake of the economic crisis that hit the world.