U.S. Bancorp's Profit Falls Under Strain of Interest-Rate Cuts
January 15 2020 - 8:30AM
Dow Jones News
By Orla McCaffrey
U.S. Bancorp's fourth-quarter profit fell to its lowest level in
two years, showing strain from three interest rate cuts last
year.
The largest regional bank by assets reported net income of $1.49
billion on Wednesday, or 90 cents a share. That is down from $1.86
billion, or $1.10 per share, a year ago. Analysts polled by FactSet
had expected $1.08 per share.
Revenue dropped 3% from the year-earlier period to $5.67
billion. It missed analysts' expectations of $5.8 billion.
The Minneapolis-based lender has remained competitive after
three interest rate cuts in 2019 threatened lending profits. Its
net interest income fell 3% from a year ago. Lower deposit-service
charges and payments revenue pushed nonlending income down
2.5%.
The $495 billion asset bank's average loan growth was 3.9% from
a year earlier, thanks to stronger residential and credit-card
lending. Loan growth among regional banks is expected to slow
alongside economic growth in 2020.
The earnings miss caps an end to a year that saw regional banks
struggle to swallow the first interest rate cuts in more than a
decade and the largest bank merger since the financial crisis.
Shares fell 0.2% in premarket trading.
(END) Dow Jones Newswires
January 15, 2020 08:15 ET (13:15 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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