Quarterly ROA of the U.S. banking industry 2003-2024
The return on assets (ROA) of the United States commercial banking industry has seen significant fluctuations over the years. Starting from a high of 1.37 percent in the first quarter of 2004, it hit a record low of -1.86 percent in the fourth quarter of 2008 due to the global financial crisis. After that, it continued to rise, albeit with fluctuations, until the first quarter of 2021, when it started to decrease again. It remained relatively stable around 1.2-1.3 percent in 2023, despite a sharp drop to one percent in the last quarter. However, in the first half of 2024, the ROA increased notably to 1.4 percent, marking a potential turning point in the industry's performance. In comparison, the ROA of the European banking industry has generally been lower than the U.S. over this period, averaging around 0.5-0.7 percent.
Steady growth amidst fluctuations in net operating income
Despite the lowest quarterly net operating income of the U.S. banking industry being measured in the fourth quarter of 2008, at a negative 35 billion U.S. dollars, the average quarterly income of all FDIC-insured institutions grew steadily after the global financial crisis, experiencing a sharp decrease due to the COVID-19 pandemic in the first half of 2020. After 2021, the industry saw another steady decrease in its quarterly income until it started to increase again towards the end of 2022. In 2023, the bank with the highest reported revenue was JPMorgan Chase.
Stability and resilience in capital adequacy
The common equity tier 1 (CET1) ratio of the U.S. commercial banking industry has shown resilience, with a slight increase in the first quarter of 2024 marking the seventh consecutive quarter of growth. Despite sharp decreases due to global financial crises and the COVID-19 pandemic, the industry has demonstrated stability and gradual recovery in its capital adequacy.
