With the best-case scenario for bank stocks this earnings season being the proverbial “better than feared,” investors may want to ponder what the industry will look like in the future to find today’s opportunities. Here’s a hint: Expect a wave of consolidation after there’s a bit more distance from last month’s collapse of Silicon Valley Bank and Signature Bank.
It’s long been said that the U.S. is overbanked compared with the rest of the world. We lead with 4,135 banking institutions, according to the Federal Deposit Insurance Corp. The United Kingdom comes in a distant second with 311, and the remainder of the top 25 countries have between 64 and 251 banks. Even on a per capita basis, the U.S. stands near the top, with 12.8 banks per million people, lagging only financial megacenters such as Luxembourg, Switzerland, Singapore, and Hong Kong.