In this article, we will take a look at 17 of the biggest finance companies by market cap.
When most people think of finance companies, they think of banks. In terms of banks, there are several types of banks. Traditional community banks take deposits and make loans to individuals. Corporate banks take deposits from generally bigger corporations and make loans to bigger corporations. Lastly, capital market banks help companies and governments issue bonds and stocks in the capital market. In addition to banks, some of the world’s biggest financial companies help operate payment networks that help merchants accept payments from their customers.
Given their growth, many of today’s biggest modern banks offer community banking, corporate banking, capital market services, and other services such as asset management.
Economically Important
Financial companies operate at the center of modern economies.
If the banks do a good job in terms of making quality loans, a country’s economy can expand and growth can be faster than it would have otherwise. The banks themselves could potentially make more money in the long run.
If banks don’t do as good of a job in terms of making quality loans, a country’s growth rate might not be as fast as it could have been. The bank’s earnings might not be as high as it could be in the long run.
Given their importance, many of the world’s leading financial institutions are actually considered systematically important and are more regulated as a result.
Leading Financial Companies
Given the size of the United States economy, many of the world’s leading financial companies are based in the United States. With that the U.S. dollar is used as a reserve currency in many nations around the world, many of the leading U.S. financial companies have global operations too.
With the growth of the Chinese economy in the past few decades, China’s economy is now the second largest economy in the world. As a result, several of the leading Chinese banks rank among the world’s largest financial companies. Given the Chinese government plays a much bigger role in the economy than Western governments do, Chinese banks are often run in the interest of the Chinese state rather than in the interest of shareholders at times. As a result, their financial performances may not match that of Western banks even if the economy of China is growing faster.
Given its huge population and rapidly growing economy, one Indian bank also ranks among the most valuable financial companies in the world.
2022
Given the high inflation this year, the Federal Reserve has increased interest rates five times already in 2022 and many analysts think the central bank will likely raise rates even further by the end of the year.
As a result of the interest rate hikes, many leading financial companies have faced headwinds.
Although higher interest rates can benefit traditional community banks by making it easier for them to earn more in net interest income, too rapid of interest rate hikes or too high of interest rates can slow economic activity, which can increase write-offs and lower overall earnings. Given the decline in some bank stocks this year, it seems the market thinks that the write-offs from the potential recession next year might outweigh the positives of higher net interest income, at least in the near term.
The higher interest rates have caused markets to decline in value, which hasn’t been good for the asset management businesses of some banks. Lastly, the higher interest rates have caused the U.S dollar to strengthen, which isn’t good in U.S. dollar terms for some international companies that do business with major financial institutions.
Given the uncertainty, it can be a good idea for long term investors to own a well diversified portfolio of stocks across many different sectors.
benjamin-suter-Issa_lRkr0o-unsplash
Methodology
For our list of 17 Biggest Finance Companies in the World, we took the 17 largest companies by market capitalization from companiesmarketcap.com’s Largest financial service companies by market cap list as of 10/30.
17 Biggest Finance Companies in the World
17. Commonwealth Bank
Market Capitalization as of 10/30: $112.29 billion
Commonwealth Bank is Australia’s most valuable bank with a market capitalization of over $112 billion as of 10/30. In terms of its stock performance, Commonwealth Bank’s stock has done well in the long term, approximately doubling from 2010 while paying a dividend as well. Given Australia’s substantial land, resources, and growing economy, Commonwealth Bank has substantial earnings power.
Alongside Mastercard Incorporated (NYSE:MA), JPMorgan Chase & Co. (NYSE:JPM), and Visa Inc. (NYSE:V), Commonwealth Bank is one of the biggest finance companies in the world by market cap.
16. American Express Company (NYSE:AXP)
Market Capitalization as of 10/30: $112.41 billion
Number of Hedge Fund Holders: 67
Given the potential for a recession in 2023, American Express Company (NYSE:AXP) added $387 million in bad loan reserves in the third quarter to bring its total provisions for credit losses to $778 million as of the end of September. Nevertheless, American Express Company (NYSE:AXP) CFO Jeff Campbell said, “Relative to pre-pandemic levels . . . our credit profile is stronger today.” As of 10/30, American Express Company (NYSE:AXP) had a market capitalization of $112.41 billion, ranking it #16 on our list of 17 Biggest Finance Companies in the World.
15. HDFC Bank Limited (NYSE:HDB)
Market Capitalization as of 10/30: $114.09 billion
Number of Hedge Fund Holders: 34
HDFC Bank Limited (NYSE:HDB) is one of India’s largest banks with a market capitalization of over $114 billion as of 10/30. Although India is facing inflation headwinds like many other places in the world, the country has substantial growth given its young population and developing economy. If HDFC Bank Limited (NYSE:HDB) maintains its market share in financial services, the company could grow substantially in the next few decades.
14. Goldman Sachs Group, Inc. (NYSE:GS)
Market Capitalization as of 10/30: $116.68 billion
Number of Hedge Fund Holders: 69
Goldman Sachs Group, Inc. (NYSE:GS) is Wall Street’s most prestigious bank and also one of its most valuable given the bank’s market capitalization of $116.68 billion. Although Goldman Sachs Group, Inc. (NYSE:GS)’s investment banking and trading businesses are both lucrative, their results can be volatile. As a result, Goldman Sachs Group, Inc. (NYSE:GS) is trying to diversify further by growing its asset management business. Given its history of success, Goldman Sachs Group, Inc. (NYSE:GS) could have more growth in the long term.
13. Toronto-Dominion Bank (NYSE:TD)
Market Capitalization as of 10/30: $116.87 billion
Number of Hedge Fund Holders: 19
Toronto-Dominion Bank (NYSE:TD) is one of the largest banks in Canada with over 90,000 employees, more than 27 million customers, and C$1.8 trillion in assets on July 31, 2022. Although it faces macroeconomic headwinds in 2022 like many other financial institutions, Canada has strong long term economic growth potential and Toronto-Dominion Bank (NYSE:TD) has long term earnings growth potential if it maintains its market share. As of 10/30, Toronto-Dominion Bank (NYSE:TD) had a market capitalization of $116.87 billion.
12. Bank of China
Market Capitalization as of 10/30: $117.15 billion
Bank of China is one of China’s big four state owned banks. Given the size of China’s economy and the central role that major banks play in China, the Bank of China has considerable assets of $4.2 trillion in 2022 according to Forbes. Although the bank faces headwinds given the Covid-19 lockdowns and the slowing economy, Bank of China has a market cap over $117 billion as of 10/30.
11. Royal Bank of Canada (NYSE:RY)
Market Capitalization as of 10/30: $128.44 billion
Number of Hedge Fund Holders: 12
Royal Bank of Canada (NYSE:RY) is one of Canada’s largest banks with 89,000 full and part time employees and 17 million clients in Canada, the United States, and 27 other countries. Royal Bank of Canada (NYSE:RY) is also the most valuable Canadian bank with a market capitalization of $128.44 billion as of 10/30. In terms of strategy in other countries besides Canada, Royal Bank of Canada (NYSE:RY) hopes to expand into the UK commercial banking market after the company fully integrates its purchase of Brewin Dolphin, a UK wealth manager, that it bought in 2022.
10. Agricultural Bank of China
Market Capitalization as of 10/30: $132.44 billion
The Agricultural Bank of China is another of China’s big four state owned banks with assets of $4.6 trillion in 2022. In addition to a slowing economy, volatility in the property market has been a headwind for the Agricultural Bank of China. As of 10/30, the Agricultural Bank of China ranked #10 on our list of 17 Biggest Finance Companies in the World with a market capitalization of $132.44 billion.
9. Morgan Stanley (NYSE:MS)
Market Capitalization as of 10/30: $139.28 billion
Number of Hedge Fund Holders: 58
Morgan Stanley (NYSE:MS) is one of the most prestigious Wall Street banks in the world which trades for a higher price to book ratio than its chief competitor, Goldman Sachs Group, Inc. (NYSE:GS). While Morgan Stanley (NYSE:MS) has a price to book ratio of around 1.52, Goldman Sachs Group, Inc. (NYSE:GS) has a price to book ratio of around 1.15. Although the difference has more to do with the revenue composition difference between the two firms, Morgan Stanley (NYSE:MS) has a higher market capitalization of almost $140 billion versus Goldman Sachs Group, Inc. (NYSE:GS)’s $116.68 billion as well.
8. China Construction Bank
Market Capitalization as of 10/30: $141.29 billion
China Construction Bank is one of the big four state owned Chinese banks with assets of $4.7 trillion. China Construction Bank also ranks #8 on our list of 17 Biggest Finance Companies in the World with a market capitalization of $141.29 billion. Given overall credit demand is weak in China, China Construction Bank and the other big four banks have faced pressure on their net interest margins this year.
7. The Charles Schwab Corporation (NYSE:SCHW)
Market Capitalization as of 10/30: $152.12 billion
Number of Hedge Fund Holders: 68
The Charles Schwab Corporation (NYSE:SCHW) is a financial services company that provides securities, brokerage, banking, financial management and other services. Although the markets are down substantially year to date, The Charles Schwab Corporation (NYSE:SCHW) nevertheless reported Q3 earnings per share of $1.10 on revenue of $5.5 billion, versus estimates of $1.05 and $5.42 billion. As of 10/30, The Charles Schwab Corporation (NYSE:SCHW) has a market capitalization of over $152 billion.
6. Wells Fargo & Company (NYSE:WFC)
Market Capitalization as of 10/30: $175.91 billion
Number of Hedge Fund Holders: 83
Although the mortgage sector faces headwinds given the higher interest rates, Wells Fargo & Company (NYSE:WFC) has performed pretty well given the circumstances in 2022. Wells Fargo & Company (NYSE:WFC) shares are down around 2.15% year to date while the stock has an annual dividend yield of around 2.56% as of November 1. Given its businesses, Wells Fargo & Company (NYSE:WFC) has quality earnings potential and the bank has a market capitalization of almost $176 billion as of 10/30.
Like Wells Fargo & Company (NYSE:WFC), Mastercard Incorporated (NYSE:MA), JPMorgan Chase & Co. (NYSE:JPM), and Visa Inc. (NYSE:V) are among the biggest finance companies in the world by market cap.
5. ICBC
Market Capitalization as of 10/30: $198.07 billion
ICBC, otherwise known as Industrial and Commercial bank of China, is the most valuable of China’s big four state owned banks with a market capitalization of almost $200 billion as of 10/30. With assets of $5.5 trillion, ICBC has the most assets in the world. Given that it is state owned, ICBC doesn’t earn as much on its assets as some of the more valuable banks on this list that have fewer assets.
4. Bank of America Corporation (NYSE:BAC)
Market Capitalization as of 10/30: $290.32 billion
Number of Hedge Fund Holders: 99
Although banks face headwinds given inflation and a potential economic slowdown, Bank of America Corporation (NYSE:BAC) nevertheless has seen strong consumer spending and an increase in consumer loans in the third quarter. Bank of America Corporation (NYSE:BAC) CEO Brian Moynihan said, “Our U.S. consumer clients remained resilient with strong, although slower growing, spending levels and still maintained elevated deposit amounts.” Given higher interest rates, the bank’s net interest margin increased to 2.06% in Q3 from 1.68% in Q2 2022 as well. As of 10/30, Bank of America Corporation (NYSE:BAC) has a market capitalization of slightly over $290 billion.
3. Mastercard Incorporated (NYSE:MA)
Market Capitalization as of 10/30: $318.39 billion
Number of Hedge Fund Holders: 137
Mastercard Incorporated (NYSE:MA) is a leading payments network that together with Visa Inc. (NYSE:V) form a duopoly in the payments sector in Western economies. Although Mastercard Incorporated (NYSE:MA) takes a small fee of around 0.3% from each transaction on its payment work, the payments add up and Mastercard Incorporated (NYSE:MA) has substantial revenue as a result. Given its high margins, Mastercard Incorporated (NYSE:MA) has substantial profits. As of 10/30, Mastercard Incorporated (NYSE:MA) has a market capitalization of $318.39 billion.
2. JPMorgan Chase & Co. (NYSE:JPM)
Market Capitalization as of 10/30: $369.81 billion
Number of Hedge Fund Holders: 104
JPMorgan Chase & Co. (NYSE:JPM) is a leading global financial services firm based in the U.S. with $2.6 trillion in assets. With $369.81 billion in market capitalization, JPMorgan Chase & Co. (NYSE:JPM) is the most valuable bank in the world. One reason for its success has been JPMorgan Chase & Co. (NYSE:JPM) CEO Jamie Dimon, who has adeptly steered the bank through the Great Recession and the growth years afterwards. Dimon does see headwinds in 2023 however.
1. Visa Inc. (NYSE:V)
Market Capitalization as of 10/30: $441.16 billion
Number of Hedge Fund Holders: 166
Visa Inc. (NYSE:V) is a leading payments network that together with Mastercard Incorporated (NYSE:MA) dominate payments between merchants and customers with credit cards in the West. Although companies like Amazon have tried to lower the fees that Visa Inc. (NYSE:V) charges and fintech could also pose a challenge, analysts nevertheless expect Visa Inc. (NYSE:V) to continue to increase earnings per share for the future. As of 10/30, Visa Inc. (NYSE:V) had a market capitalization of $441.16 billion, ranking #1 on our list of 17 Biggest Finance Companies in the World.
You can also take a look at 20 Most Admired Companies in the World in 2022 and 15 Biggest Dow Companies By Market Cap.
Follow Insider Monkey on Twitter
Suggested articles:
- 22 Biggest Economies in the World in 2022
- 15 Largest IPOs of All Time Worldwide
- 15 Biggest Global Tech Companies by Market Cap
Disclosure: None. 17 Biggest Finance Companies in the World is originally published on Insider Monkey.
