Market Overview

Some Big Banks Have Wildly Different Risk Exposure Than Others

Some Big Banks Have Wildly Different Risk Exposure Than Others
Related WFC
Q4 13F Roundup: How Buffett, Einhorn, Ackman And Others Adjusted Their Portfolios
Banks And Info Tech Lead Way In Sharp Rally Amid Hopes For Geopolitical Progress
Berkshire Hathaway Q4 Earnings, Q4 And Current Book Value Estimates (Seeking Alpha)

The graph below was produced by Capital Market Labs.

While the four mega-cap banks in the U.S. may seem like the "same," they're not. And they don't face the same level of risk.

Generally speaking, business is doing well, but the consumer...not as much.

Real wages are lower than they were seven years ago, which arguably makes exposure to consumer debt riskier than exposure to commercial debt.

Below, let's chart all banks in the country with a market cap above $5 billion. Let's also plot cash ratio on the x-axis, and the percentage of banks' total loans that are consumer-based on the y-axis.


It's clear that JPMorgan Chase & Co. (NYSE: JPM), for example, has about 200 percent more exposure to the consumer than Wells Fargo & Co (NYSE: WFC).

It also has nearly 20 percent more exposure to consumer debt than Bank of America Corp (NYSE: BAC) and Citigroup Inc (NYSE: C).

Ophir Gottlieb can be found on Twitter @ophirgottlieb.

Posted-In: bank risk exposure big banks consumer debt by bankTrading Ideas General Best of Benzinga


Related Articles (BAC + C)

View Comments and Join the Discussion!

A Look Back At The Grain Market On Friday

2 Charts That Show There's Tesla, And Then There's Everybody Else