Mega Cap Banks Have Wildly Different Consumer Risk Exposure

While the four mega cap banks in the US may all seem like the same bank, they are not, and do not have the same risk… Businesses are doing well... very well... all-time highs in earnings well. The consumer, not so well. Real wages are lower no than they were seven years ago. That makes exposure to consumer debt more risky than exposure to commercial debt, or at least one could argue. Below we chart all banks in the United States with Market Caps > $5B and plot on the y-axis the percent of their total loans that are consumer loans. On the x-axis we plot the cash ratio. [RiskExposure1] We can see that JPM has about 200% more exposure to the consumer than WFC and ~20% more exposure to consumer debt than BAC and C.