U.S. Bancorp Says Payments-Unit Success Highlights Recovery
(Bloomberg) -- U.S. Bancorp said renewed strength in its payments businesses is a bullish indicator for both its own prospects and the national economy.
“Our outlook economically has improved and continues to improve,” Chief Financial Officer Terry Dolan said in a phone interview Thursday after the bank reported second-quarter earnings. “Consumers and businesses are optimistic and really increasing the pace of spending.”
Total sales across the bank’s corporate-payment systems, merchant acquiring and credit- and debit-card units exceeded 2019 levels for the first time since the start of the pandemic, the Minneapolis-based bank said in a statement.
Those improvements helped push diluted earnings per share to $1.28, surpassing the average estimate of $1.13 among 22 analysts in a Bloomberg survey.
Shares of the company climbed 2.8% to $58.58 at 3:01 p.m. in New York, the highest intraday price in almost a month.
U.S. Bancorp joined several Wall Street giants that this week offered rosy assessments of economic conditions and consumer confidence. Credit quality was another bright spot. The bank returned $350 million in reserves previously set aside for loans expected to sour.
Despite the upbeat attitude, U.S. Bancorp is among a number of financial firms still struggling with weak loan growth. Average total loans dipped 7.5% from the same time last year, echoing declines at rivals including Bank of America Corp. and Wells Fargo & Co. Banks blamed the weakness on hefty stimulus doled out by the federal government in response to the pandemic.
Dolan acknowledged that loan growth was “relatively soft.” But he said the bank is “really well-positioned to be able to take advantage of the economic recovery,” especially given its investments in digital capabilities.
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