Revenue from client fees drove growth for U.S. Bancorp, reflecting an upbeat second quarter for the banking industry despite recent concerns about the national economy.
The Minneapolis-based parent company of U.S. Bank, the nation’s fifth-largest, saw strong profits from payment services like credit card processing and charges on investment services and trust management.
After all the uncertainty seen in the past few months, with low consumer confidence surveys and a volatile stock market, Chief Financial Officer John Stern said in an interview the economy looks resilient from U.S. Bank’s perspective as consumer and business clients continue to spend money, make investments and demonstrate confidence.
Stern said clients are moving on from the angst and paralysis. He said U.S. Bank is seeing strength in areas like commercial loan growth, up 7% compared with last year, and credit card spending, which rose between 4% and 5%. Those figures demonstrate a resilient U.S. economy, he said.
U.S. Bank on Thursday reported $1.8 billion in profit on $7 billion in second-quarter revenue. Earnings per share at $1.11 beat Wall Street analysts’ estimates, while revenue came in under the consensus target. Net income rose 13.2% compared with second-quarter results a year earlier.
Investors focused attention on the bank’s net interest income, generated from providing loans, which reached $4.1 billion, up 0.7% over last year, though U.S. Bank lagged margins other banks posted when reporting earnings this week.
The stock price closed down 1% on Thursday.
CEO Gunjan Kedia said the company remains focused on its core priorities of expense management, organic growth and transforming the bank’s payments system. She also said the company has seen progress on its goal of providing multiple services to its clients.
