Taylor Scott
The S&P 500 is a stock market index that comprises 500 large-cap companies traded on American stock exchanges. It includes about 80% of the American market by capitalization. The index includes 21 bank stocks, ranging from the nation's four megabanks (JPMorgan Chase, Bank of America, Wells Fargo, and Citigroup) to stand-alone investment banks (Goldman Sachs and Morgan Stanley) and regional banks (BB&T, Citizens Financial, and more).
| Characteristics | Values |
|---|---|
| Number of bank stocks | 21 |
| Number of common stocks | 503 |
| Number of companies | 500 |
| Number of megabanks | 4 |
| Names of megabanks | JPMorgan Chase, Bank of America, Wells Fargo, Citigroup |
| Investment banks | Goldman Sachs, Morgan Stanley |
| Custodial banks | Bank of New York Mellon, State Street |
| Regional banks | BB&T, Citizens Financial, Comerica, Fifth Third, Huntington Bancshares, KeyCorp, M&T Bank, People's United, PNC Financial, SunTrust Banks, U.S. Bancorp, Zions, Capital One |
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What You'll Learn
Bank stocks on the S&P 500 come in different shapes and sizes
The S&P 500 is a stock market index that comprises 500 large-cap companies traded on American stock exchanges. It includes about 80% of the American market by capitalization and is weighted by free-float market capitalization, meaning more valuable companies account for relatively more weight in the index.
There are 21 bank stocks on the S&P 500, and they come in different shapes and sizes. While all are big, they range from the smallest, People's United, with a $41 billion balance sheet, to the nation's four megabanks: JPMorgan Chase, Bank of America, Wells Fargo, and Citigroup, all of which have close to or over $2 trillion worth of assets.
There are also stand-alone investment banks, Goldman Sachs and Morgan Stanley, which are technically bank holding companies that gained access to the Federal Reserve's discount window during the financial crisis. The nation's two biggest custodial banks, Bank of New York Mellon and State Street, are also on the list, serving large institutional customers.
Regional banks are also represented on the S&P 500, including BB&T, Citizens Financial, Comerica, Fifth Third, Huntington Bancshares, KeyCorp, M&T Bank, PNC Financial, SunTrust Banks, U.S. Bancorp, and Zions. Capital One, a recent addition to the list, is a monoline credit card company that has transformed into a regional bank.
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The S&P 500 includes the nation's four megabanks
The S&P 500 is a stock market index that comprises 500 large-cap companies traded on American stock exchanges. It is regarded as a gauge of the large-cap US equities market. The index includes about 80% of the American market by capitalization and is weighted by free-float market capitalization, meaning that more valuable companies account for relatively more weight in the index.
JPMorgan Chase and Wells Fargo have seen their shares reach new highs even in the wake of the financial crisis. On the other hand, Bank of America and Citigroup have dealt their shareholders serious losses since the financial crisis, with Bank of America's stock still down roughly 60% since its pre-crisis high and Citigroup's shares off 90%.
The S&P 500 also includes stand-alone investment banks Goldman Sachs and Morgan Stanley, which are technically bank holding companies that obtained charters during the financial crisis to access the Federal Reserve's discount window. The index features the nation's two biggest custodial banks, Bank of New York Mellon and State Street, which serve large institutional customers.
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Custodial banks on the S&P 500
The S&P 500 is a stock market index that comprises 503 common stocks issued by 500 large-cap companies traded on American stock exchanges. It includes companies from various industries, and among these are banks. While I cannot find specific references to custodial banks in the S&P 500, I can provide a general overview of custodial banks and their role in the financial system.
A custodian bank, or simply a custodian, is a specialised financial institution that provides securities services and post-trade solutions for asset owners and managers. These asset owners can include sovereign wealth funds, central banks, insurance companies, pension funds, mutual funds, and hedge funds. Custodian banks are responsible for the safekeeping, settlement, and administration of securities, as well as asset servicing such as income collection and corporate actions. They do not engage in traditional commercial or consumer banking activities like lending.
The role of custodian banks has evolved over time, and they now offer a wider range of financial services to their clients. These services can include fund administration, transfer agency, securities lending, and trustee services. Some custodian banks have become global custodians, safekeeping assets for clients in multiple jurisdictions worldwide.
The market size of the custody, asset, and securities services industry in the US was valued at $32.5 billion in 2022, with a year-over-year growth of 2.9% between 2017 and 2022. The top players in this industry include well-known financial institutions such as State Street, HSBC, Citi, and J.P. Morgan.
While I cannot provide specific names of custodial banks included in the S&P 500, it is likely that some of the larger and more established custodian banks are part of this stock market index, given their significant market presence and the diverse range of companies the S&P 500 comprises.
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Regional banks on the S&P 500
The S&P 500 is a stock market index that comprises 503 common stocks issued by 500 large-cap companies traded on American stock exchanges. The index includes about 80% of the American market by capitalization and is weighted by free-float market capitalization, giving more weight to more valuable companies.
The index includes regional banks, which are banks that operate in specific geographic regions and typically serve local communities and businesses. Regional banks can vary in size and scope, but they generally have a smaller market presence than national or global banks.
Several regional banks are part of the S&P 500, and their inclusion in the index indicates their large market capitalization. However, regional banks have faced challenges in recent years, and some have been at risk of being delisted from the S&P 500. For example, in 2023, Zions and Comerica experienced a stock sell-off, threatening their inclusion in the index. Similarly, Silicon Valley Bank and First Republic were removed from the benchmark after deposit runs led to their government seizure.
Other regional banks in the S&P 500 include KeyCorp and Citizens Financial, which have market capitalizations above the threshold for inclusion in the index. However, their smaller size compared to other banks in the index makes them more vulnerable to potential delisting.
The performance of regional banks in the S&P 500 is measured by the S&P Regional Banks Select Industry Index. This index tracks the stocks of regional banks within the broader S&P Total Market Index. It provides insights into the financial health and stability of the regional banking sector.
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Investment banking companies on the S&P 500
The S&P 500 is a good way to screen for bank stocks and eliminate the risk of investing in a new, untried bank. The index includes 21 bank stocks, which come in different shapes and sizes, though they are all big. The smallest on the list, People's United, has a $41 billion balance sheet.
The nation's four megabanks are included, all with close to or over $2 trillion worth of assets on their balance sheets. These are:
- JPMorgan Chase (JPM)
- Bank of America (BAC)
- Wells Fargo (WFC)
- Citigroup (C)
There are also stand-alone investment banks, such as Goldman Sachs and Morgan Stanley. Bank of America and Citigroup have dealt their shareholders serious losses, with Citigroup's shares off by 90%. However, Wells Fargo and JPMorgan Chase have gone on to new highs, even in the wake of the worst economic downturn since the Great Depression.
Other investment banking companies on the S&P 500 include:
- Bank of New York Mellon
- State Street
- BB&T
- Citizens Financial
- Comerica
- Fifth Third
- Huntington Bancshares
- KeyCorp
- M&T Bank
- PNC Financial
- SunTrust Banks
- US Bancorp
- Zions
- Capital One
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Frequently asked questions
The S&P 500 is a stock market index that comprises 500 large-cap companies traded on American stock exchanges.
There are 21 bank stocks on the S&P 500.
The S&P 500 includes the nation's four megabanks: JPMorgan Chase, Bank of America, Wells Fargo, and Citigroup. It also includes Goldman Sachs and Morgan Stanley, which are standalone investment banks.
The S&P 500 includes the two biggest custodial banks, Bank of New York Mellon and State Street, as well as a smattering of regional banks like BB&T, Citizens Financial, and US Bancorp.
The S&P 500 can be used as an initial screen for investors to identify good bank stocks and eliminate the risk of investing in untried banks that have yet to prove their mettle through different stages of a credit cycle.
