The U.S. retail banking business is large and diverse. More than 15,000 banks, thrifts and credit unions hold nearly $10 trillion in total deposits. Credit unions have been increasing their share of the business since 2008, although their share remains well under 10%.

Bank profitability increased sharply in the first half of 2010, driven by huge declines in loan-loss provisions and wide net interest margins. But bank earnings remain well below pre-2007 profit levels. Revenue is down and is expected to remain weak, mostly due to limp loan growth and new laws and regulations limiting bank fee income on overdrafts and debit card transactions.

Despite the profit improvement, more than 800 banks, or more than 10% of the total number of banks, are on the FDIC’s problem list. Many of those banks will likely be consolidated into larger, healthier institutions. The FDIC expects bank failures to peak in 2010.

Continued high unemployment, fears about job loss and pessimism about the economy continue to influence consumers to reduce spending and borrowing and save more money. The personal savings rate has more than doubled in 2008, 2009 and 2010, and continues to grow. Mortgage originations and credit card debt are down sharply.

Despite the increase in savings, many households still don’t have enough money to meet their expenses. Many are tapping into their retirement accounts and going without important financial safety nets, like life insurance.

This report builds on the analysis presented in previous Mintel reports including Deposit Accounts—July 2010, Retail Banking, December 2009, Retail Banking—September 2008, as well as previous Mintel reports on this subject.