U.S. Bancorp Cuts Earnings Expectations
September 15 2016 - 05:00PM
Dow Jones News
U.S. Bancorp lowered its profit expectations on Thursday,
conceding that a tough environment for bank earnings is likely here
to stay.
The Minneapolis-based lender took its expectations for return on
assets and return on equity down a notch during a presentation at
its Investor Day event after low interest rates and a slow economic
recovery led the bank to fall short of its goals for these metrics
in recent years.
The bank cut its long-term return-on-assets target to between
1.35% and 1.65%, from between 1.60% and 1.90%, a goal set in 2013;
and its return-on-equity target to between 13.5% and 16.5%, from
between 16% and 19%. From 2013 and 2015, the bank's return on
assets was 1.54% and the return on equity was 14.8%.
At the same time, the bank's profitability as measured by these
metrics is better than other national and large-regional banks,
according to U.S. Bancorp.
Bank executives said they were prepared to deal with low
interest rates and a flatter yield curve, which both tend to make
banking less profitable. "We're grinders," said new Chief Financial
Officer Terry Dolan.
(END) Dow Jones Newswires
September 15, 2016 16:45 ET (20:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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