In this article, we are going to share with you a list of the 20 most valuable financial companies in the world. If you want to skip our comprehensive analysis of these companies, go directly to the 5 Most Valuable Financial Companies in the World.
Before getting into the list, we must develop some context to understand the importance of financial companies and how without them, nations would fall short of their economic potential.
An economy consists of different sectors that contain various businesses, which provide goods and services to consumers. These sectors contain groups of companies based on the goods and/or services that they provide. A core sector that drives a nation’s economy is the financial sector, which consists of financial companies that provide economic services to people and corporations. There are three classes of financial services, namely, personal, consumer and corporate. The economic growth of a country shares a direct relationship with the strength of its financial services industry. Therefore, the financial services industry of a country must be robust, which would allow for better risk management and economic prosperity. Insurance companies, commercial banks, credit unions, investment banks, accountancy firms, non-banking financial companies, stock brokerages, credit card companies, among many others contribute to the finance industry.
Even though this industry has been a victim of some major dips, such as the Great Recession, which happened a little over a decade ago, it has powered through those trying times and emerged strong. According to the Financial Services Global Market Report 2021: COVID-19 Impact and Recovery to 2030, the global financial services market are expected to grow from $20.4 trillion in 2020 to $22.5 trillion in 2021, at a compound annual growth rate (CAGR) of 9.9%.
The Covid-19 crisis has caused many industries to suffer but it has also been a real revelation for the finance industry. Social distancing has become the norm, and this has driven the finance industry to break away from its traditional methods of operation and adapt to new technologies to offer digital solutions to their customers. The days of paying in cash and waiting in line for using an ATM are long gone, with banks providing mobile applications for smartphones, you can pay for anything at the tap of a button. Initially, financial technology companies were considered rivals wanting to overpower the banking and finance industry, exploiting their lack of incorporating technology. Now many banks have collaborated with fintech to offer their customers the ultimate user experience. Warren Buffett, the CEO of the conglomerate Berkshire Hathaway Inc. (NYSE: BRK-B), did not shy away when it came to investing $500 million in a Brazilian fin-tech startup Nubank. HSBC Holdings plc (NYSE: HSBC), Wells Fargo & Company (NYSE: WFC), and Bank of America Corporation (NYSE: BAC) are just a few to name out of the many banks that have made partners with fintech companies to reap the benefits of cloud computing and artificial intelligence.
As mentioned earlier, like other industries, the finance industry served its time with the roaring global pandemic. The coronavirus crisis forced countries to go into nationwide lockdowns and induced market instability. This wreaked havoc and panic in the world with the shutdown of economic activity, uncertainty prevailed which led to investors withdrawing their money. This caused a global stock market crash in February 2020. The world lost all hope in March, when the largest drops in recent history were observed and it was not until April 2020 that some recovery was set. The finance industry took a major blow with the advent of Covid-19, and it could take up to 2025 to recover from this. The global financial services market is expected to hit $28.5 trillion by 2025, at a CAGR of 6%, which is a 14-figure number.
If we look at the insurance industry, which is a key contributor to the global financial services market, the global insurance industry generated gross premiums worth about $5.03 trillion in 2019. According to the Insurance Global Industry Almanac 2016-2025, the global insurance market was expected to generate gross premiums up to 5.8 trillion from 2016-2020, which shows a compound annual growth rate (CAGR) of 2.2%.
Our Methodology
To compile this list of the 20 Most Valuable Financial Companies in the World, we performed extensive research to identify the financial services corporations that have been appearing at the top over a period of 2 decades. We then looked the companies up on Yahoo Finance for their stock prices and market capitalization and ranked them based on their respective market values. Our list features 20 companies, 3 of which are from Europe, 5 are from China, 3 of which are featured in the top 10 of our list, 1 is from Canada, and 11 are from America.
Photo by Mikel Parera on Unsplash
Enough waiting, let’s dive into our list of the 20 Most Valuable Financial Companies in the World with number twenty:
Most Valuable Financial Companies in the World
20. AXA SA (EPA: CS.PA)
Axa was born in the year 1816, about 205 years ago, and aged as a French multinational company that provides insurance, investment management among other financial services. It has its headquarters in Paris and is worth $63 billion on the open market.
19. The PNC Financial Services Group, Inc. (NYSE: PNC)
Based in Pittsburgh, Pennsylvania, PNC Financial Services Group Inc. (NYSE: PNC) is a financial services company that provides a range of financial services to its consumers which include loan services, retail banking, asset management, estate management, information processing among many others. The market value of PNC Financial Services Group Inc. (NYSE: PNC) is valued at $81.4 billion.
Like Berkshire Hathaway Inc. (NYSE: BRK-B), Morgan Stanley (NYSE: MS), Wells Fargo & Company (NYSE: WFC), Bank of America Corporation (NYSE: BAC), Citigroup Inc. (NYSE: C), HSBC Holdings plc (NYSE: HSBC) and Goldman Sachs Group Inc. (NYSE: GS), PNC Financial Services Group Inc. (NYSE: PNC) is one of the most valuable financial companies in the world.
18. Allianz SE (XETRA: ALV.DE)
Allianz is a German MNC that provides financial services, mainly related to insurance and asset management. It has over 100 million customers across the globe and has its headquarters in Munich, Germany. Allianz provides financial services that include property insurance, life insurance, and asset management which give it a market value of $105.2 billion.
17. HSBC Holdings plc (NYSE: HSBC)
HSBC Holdings plc (NYSE: HSBC) is one of the largest investment banks in Europe. It has its headquarters in London and has over 3900 offices worldwide serving more than 40 million customers. With all its assets amounting to $2.9 trillion, HSBC Holdings plc (NYSE: HSBC) has a market value of $119.8 billion.
16. Goldman Sachs Group Inc. (NYSE: GS)
With its headquarters in New York City, one of the most energetic cities in America, Goldman Sachs Group Inc. (NYSE: GS) is a diversified global financial institution that offers services to governments, corporations, individuals, and even other financial institutions. They offer services for prime brokerage, asset management, investment banking among many others. They report to have over 3 million customers and their total assets amounted to $1.16 trillion in 2020. The market capitalization of Goldman Sachs Group Inc. (NYSE: GS) values $125.2 billion.
Artisan Partners, in its Q1 2021 investor letter, mentioned The Goldman Sachs Group, Inc. (NYSE: GS). Here is what the fund said:
“Financial services firm Goldman Sachs is a best-in-class franchise with a premier brand that attracts top talent and sustains market share across its businesses. We believe this has helped Goldman whether recent market volatility. In addition to de-levering risk-weighted assets, Goldman is also growing its digital investment footprint through the expansion of features on its Marcus Invest platform. The company’s stability—and ability to grow its brand even in tough times—has kept us invested over the long term.”
15. Bank of China Limited (HKSE: 3988.HK)
We are going to mention 3 more banks that belong to China in our list of the 20 Most Valuable Financial Companies in the World. The bank of China is one of the 4 biggest commercial banks in China and is state-owned. It was founded in the year 1912 and has its headquarters in Beijing, the capital of China. Assets worth $3.7 trillion merit its inclusion in our list and it has a market value of $130.2 billion.
14. American Express Company (NYSE: AXP)
The American Express Company (NYSE: AXP) ranks at number 14 in our list of the 20 Most Valuable Financial Companies in the World, boasting a market capitalization of $132.3 billion. Owned by Berkshire Hathaway Inc. (NYSE: BRK-B), the American Express Company (NYSE: AXP) are American financial services and travel corporation that operates in more than 130 countries. The company’s main competitors, Mastercard Incorporated (NYSE: MA) and Visa Inc. (NYSE: V) are also a part of the 20 Most Valuable Financial Companies in the World as well.
In its Q4 2020 investor letter, Bretton Fund highlighted a few stocks and American Express Co (NYSE: AXP) is one of them. Here is what the fund said:
“American Express has elements of both a bank (it extends credit card loans) and a payments processor (most of its revenue is fees from cardholders and merchants) and was hit pretty hard by Covid-19, though we expect most of the impact will be transitory. It has a relatively diversified customer base overall, but a meaningful portion of its card activity is from business travel, which…there wasn’t a lot of last years. Similar to the banks, American Express recognized loan losses in anticipation of large defaults, though it’s not clear all of that will come to pass. Its stock returned -1.1%, while earnings per share were down 53%.”
13. Royal Bank of Canada (TOR: RY.TO)
A market value amounting to $144.9 billion explains why the Royal Bank of Canada (RBC) stands tall among the largest banks in the world by market capitalization. It has over 86,000 employees that provide services to clients in 29 countries including Canada and the United States. These numbers along with the fact that it is one of the biggest banks in Canada merits its inclusion in our list of the 20 Most Valuable Financial Companies in the World.
12. Citigroup Inc. (NYSE: C)
Citigroup Inc. (NYSE: C) is an American investment bank and diversified financial services corporation based in New York City. The company has operations in more than 160 countries, with an astound consumer base of more than 200 million customers who are serviced by 210,000 employees. Citigroup Inc. (NYSE: C) competes with Wells Fargo & Company (NYSE: WFC), Bank of America Corporation (NYSE: BAC), and JPMorgan Chase & Co. (NYSE: JPM). Together these four banks make up the “Big Four” banking institutions in America that dominate the banking and finance industry. The company is currently worth $147.6 billion on the open market.
11. Agricultural Bank of China Limited (HKSE: 1288.HK)
Another bank that belongs to the “big four” banks in China is the Agricultural Bank of China, which provides services such as deposits, loans, currency trading among many others to individuals and corporations. The market capitalization for the agricultural bank of China, also known as AgBank, stands at $161.5 billion.
Like Berkshire Hathaway Inc. (NYSE: BRK-B), Morgan Stanley (NYSE: MS), Wells Fargo & Company (NYSE: WFC), Bank of America Corporation (NYSE: BAC), Citigroup Inc. (NYSE: C), HSBC Holdings plc (NYSE: HSBC) and Goldman Sachs Group Inc. (NYSE: GS), Agricultural Bank of China is one of the most valuable financial companies in the world.
10. Morgan Stanley (NYSE: MS)
Founded by J.P Morgan’s grandson, Henry Morgan, Morgan Stanley (NYSE: MS) is an American investment bank and financial services corporation. The company has been actively involved in cryptocurrency. As of compiling this list of the 20 Most Valuable Financial Companies in the World, Morgan Stanley (NYSE: MS) bought over 28,000 shares of gray-scale bitcoin to meet the demand of its high-net-worth customers. As of 2021, Morgan Stanley (NYSE: MS) is among the top 100 on the Fortune 500 and is worth $163.17 billion on the open market.
Like Berkshire Hathaway Inc. (NYSE: BRK-B), Wells Fargo & Company (NYSE: WFC), Bank of America Corporation (NYSE: BAC), Citigroup Inc. (NYSE: C), HSBC Holdings plc (NYSE: HSBC), and Goldman Sachs Group Inc. (NYSE: GS), Morgan Stanley (NYSE: MS) is one of the most valuable financial companies in the world.
9. Ping An Insurance (Group) Company of China, Ltd. (HKSE: 2318.HK)
This is the first of the 3 Chinese companies we mentioned who made it to the top 10 of our list. Ping An Insurance is a Chinese holding conglomerate with subsidiaries in areas of banking, asset management, insurance, healthcare, financial services among many others. The market value for Ping An of China is a whopping $185.3 billion.
Like Berkshire Hathaway Inc. (NYSE: BRK-B), Wells Fargo & Company (NYSE: WFC), Bank of America Corporation (NYSE: BAC), Morgan Stanley (NYSE: MS), Citigroup Inc. (NYSE: C), HSBC Holdings plc (NYSE: HSBC) and Goldman Sachs Group Inc. (NYSE: GS), Ping An Insurance is one of the most valuable financial companies in the world.
8. Wells Fargo & Company (NYSE: WFC)
Wells Fargo & Company (NYSE: WFS) is an American financial services corporation that provides banking, investment, and mortgage services with operations in more than 40 countries. Wells Fargo & Company (NYSE: WFC) stands among the top 10 in our list of the 20 Most Valuable financial companies with a market capitalization of $189.2 billion.
7. China Construction Bank Corporation (HKSE: 0939.HK)
China Construction Bank is the third-largest bank in our list of the 20 Most Valuable Financial Companies in the World with a market value of $200.7 billion, which is more than 3 of the big 4 banking institutions in America. It has more than 340 million retail and corporate customers and over 14,900 domestic branches.
6. Industrial and Commercial Bank of China Limited (HKSE: 1398.HK)
The Industrial and Commercial Bank of China is a state-owned Chinese commercial bank that provides banking, finance, and insurance services. The market value of ICBC is an astounding $289.6 billion. The industrial and Commercial Bank of China operates in 41 countries along with its 17,000 domestic branches.
Like Berkshire Hathaway Inc. (NYSE: BRK-B), Wells Fargo & Company (NYSE: WFC), Bank of America Corporation (NYSE: BAC), Morgan Stanley (NYSE: MS), Citigroup Inc. (NYSE: C), HSBC Holdings plc (NYSE: HSBC) and Goldman Sachs Group Inc. (NYSE: GS), The Industrial and Commercial Bank of China is one of the most valuable financial companies in the world.
5. Bank of America Corporation (NYSE: BAC)
We have reached the top 5 of our list of the 20 Most Valuable financial companies in the world, placing Bank of America Corporation (NYSE: BAC) at number 5. Much like one of its competitors, Citigroup Inc. (NYSE: C), The Bank of America Corporation (NYSE: BAC) is an American Investment Bank that has operations in more than 30 countries and a market capitalization of $355.9 billion.
ClearBridge Investments, in its Q1 2021 investor letter, mentioned Bank of America Corporation (NYSE: BAC). Here is what the fund said:
“Higher long-term interest rates supported financials such as Bank of America, which has shown both defensive and offensive characteristics in the past year. We believe it continues to be the least risky large bank from a credit standpoint, with conservative underwriting and controlled risk-taking, a leading consumer deposit franchise, scale, and technology. It is also a leader in its commitments to sustainability, or as it terms it, responsible growth. Disclosure and reporting at all levels form a large part of this commitment, including gender diversity and equality, environmental commitments, and support of communities in which it operates. In the first quarter, Bank of America announced it is setting a goal of net-zero greenhouse gas (GHG) emissions in its supply chain and operations, and notably also in its financing activities, before 2050.”
4. Mastercard Incorporated (NYSE: MA)
We see the names “Mastercard” and “Visa” all around us. Mastercard Incorporated (NYSE: MA) is an American financial services company and a renowned payment network. In 2014, Mastercard Incorporated (NYSE: MA) collaborated with Apple to incorporate a mobile wallet feature, Apple Pay, in the then-new iPhone 6 and Apple watch which facilitated users with the ability to digitize credit and debit cards transactions. The market value of Mastercard Incorporated (NYSE: MA) values at $364.3 billion.
3. JPMorgan Chase & Co. (NYSE: JPM)
The biggest bank in America, JPMorgan Chase & Co. (NYSE: JPM), is a banking and financial services corporation that has assets worth $3.39 trillion. The bank serves in more than 100 countries and is worth $467.4 billion on the open market.
2. Visa Inc. (NYSE: V)
Visa Inc. (NYSE: V), the main competitor of Mastercard Incorporated (NYSE: MA) and American Express Company (NYSE: AXP), is a multinational American financial services corporation that allows for electronic transactions through its branded credit, debit, and prepaid cards. Visa Inc. (NYSE: V) boasts a market capitalization of $499.2 billion.
ClearBridge Investments, in its Q1 2021 investor letter, mentioned Visa Inc. (NYSE: V). Here is what the fund said:
“To make room for these new names with more attractive outlooks related to the reopening, we sold out of companies where the thesis is not playing out at the pace we expected including Visa.”
1. Berkshire Hathaway Inc. (NYSE: BRK-B)
We have reached the top of our list of the 20 Most Valuable financial companies in the world, placing Berkshire Hathaway Inc. (NYSE: BRK-B) at number 1. Berkshire Hathaway Inc. (NYSE: BRK-B), is an American holding conglomerate led by Warren Buffett and has assets worth $884.3 billion. As of 2021, Berkshire owns a little over 5% of Apple, which has a market value of more than $2 trillion, making this Buffett’s biggest investment in another publicly traded company. On the open market, Berkshire Hathaway Inc. (NYSE: BRK-B) is worth $632.6 billion, the highest on our list.
https://finance.yahoo.com/news/20-most-valuable-financial-companies-173637305.html
