No big bank will remember 2008 fondly. That was the year that Lehman Brothers blew up, subprime mortgage-backed securities soured, and the global financial system was generally brought to its knees. Bailouts and strict new regulations followed, with policymakers pushing to rein in the profitable but risky behavior that flourished before the crash. In the future, banking would be a safer but leaner business.
Over the past 10 years, three of America’s biggest banks—JPMorgan, Wells Fargo, and Goldman Sachs—have made more in cumulative profits than during the previous decade of supposed boom times (adjusted for inflation). Others, like Bank of America, Citigroup, and Morgan Stanley, haven’t fared as well in the aftermath of the crisis.
The biggest winner, JPMorgan, has made just over $200 billion in profit in the past decade, almost double its result in the previous 10 years. Wells Fargo also stands out, going from under $80 billion in the 10 years to 2008 to netting more than $190 billion in the 10 years since. Goldman Sachs, which morphed from a pure-play investment bank into a more diversified bank holding company after the crisis, boosted its profit by $20 billion in the decade after the crisis, versus the decade before it.
The biggest losers are Citigroup and Bank of America, which generated the highest cumulative profits in the 10 years to 2008 but have since fallen behind. It’s tempting to say that the banks’ myriad legal problems were to blame—Bank of America has paid nearly $80 billion in fines since the crisis—but none of the lenders have been strangers to scandal.
Overall, for all of the talk about cracking down on the excesses and misdeeds that marked much of the 2000s in the financial industry, the the six largest US banks amassed some $643 billion in cumulative profits over the past 10 years. That’s up from $634 billion in the previous decade.