US Bancorp 4Q profit and revenue beat expectations, but write-offs for bad loans still rising
By Joshua Freed, APWednesday, January 20, 2010
US Bancorp profit rises, but so do charge-offs
CHARLOTTE, N.C. — U.S. Bancorp said Tuesday its first-quarter profit rose nearly 55 percent from a year ago, helped by higher revenue from its fee-based businesses and slowing consumer loan losses.
The bank also benefited from growth in traditional deposits, giving it a cheap source of money for loans.
But the Minneapolis bank still wrote off more bad loans during the quarter, and expects those write-offs to remain at a similar level this quarter as well, because of economic conditions.
Net loan charge-offs were $1.14 billion, up 2.3 percent from the fourth quarter 2009.
The increase was driven by economic factors affecting residential housing markets, the bank said, as well as credit costs associated with credit card and other consumer loans as the economy weakened. But it said the upward trends in charge-offs and bad loans “continued to moderate during the first quarter.”
“The best indicator of loan demand is people who have it, can use it, it’s theirs if they want it, it’s a preferred rate, and they don’t,” Chairman and CEO Richard Davis said. “And until that starts to turn, that’s your best proxy for what the real loan demand is out in the real world, and we’re not seeing it.”
S Bancorp said it earned $580 million, or 30 cents a share, for the last three months of 2009, up from $259 million, or 15 cents a share, a year ago.
The profit and its $4.38 billion in revenue were better than analysts expected.
US Bancorp, based in Minneapolis, has been under pressure to raise its quarterly dividend from the current 5 cents per share. It’s taking a wait-and-see approach, though.
CEO Richard Davis said that before the dividend is raised the bank needs a better sense of its future profits, and it needs to know what new regulations the government plans. President Barack Obama has proposed a 0.15 percent tax on bank liabilities to get back the government’s bailout money. Like several other big banks, US Bancorp repaid its bailout money in June.
For the full year, U.S. Bank reported a profit of $1.8 billion, down from $2.82 billion for 2008.
Tags: Barack Obama, Charlotte, Dividends, Government Regulations, Industry Regulation, Minneapolis, Minnesota, North America, North Carolina, United States
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February 20, 2010: 10:58 pm
richard davis, ceo, is bogus. sept 15, 09 he told reuters news that the shareholders would hear something good about the dividend in the near term. he took his bonus and stock options and then thumbed his nose at the shareholders. said we’re going to wait and see. sounds like a bold-faced lie to me. the board of this company is gutless—-and i am a shareholder. what does that make me, stupid? i guess so. only in america, the fraud capital of the world. |
jerry suess