JPMorgan Chase & Co (JPM), Bank of America Corp (BAC)–Understanding Banks: Start With the Basics

There are credit cards. I have one of those miles credit cards, where I pay a fee every year, and I get a lot of miles, and I get a lot of use out of it, so I’m happy to pay that fee. That fee is another part of the banking fee.

When you add these all up, even when we look at a bank like JPMorgan Chase & Co (NYSE:JPM), which I think people look at as a particularly complex bank, that all adds up to about 80% of its revenue. That’s even before you start touching any of the trading and derivative stuff that really gets hairy for people.

When we look at the next tier of banks — that would be like a US Bancorp — we would consider that a super-regional, or BB&T and on into the smaller banks, then the concentration of what I would see as the easier-to-understand businesses, that expands to being most of the business.

At the very top end, you have a slice of the banks that is harder to understand; but even for those, most of the business I feel like is pretty basic.

The article Understanding Banks: Start With the Basics originally appeared on Fool.com is written by Matt Koppenheffer.

Matt Koppenheffer owns shares of Bank of America and JPMorgan Chase & Co (NYSE:JPM).. The Motley Fool recommends Bank of America and Wells Fargo. The Motley Fool owns shares of BAC, C, JPM, and Wells Fargo. 

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