April 21, 2010
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News: U.S. Bancorp Earnings Escalate At Consumer Expense
The nation's fifth largest bank, U.S. Bancorp based out of Minneapolis, Minnesota reported on 2010's first quarter results. Like many other major U.S. banks and credit card companies, U.S. Bancorp saw a rise in interest and fee income for the first quarter. A plus for U.S. Bancorp who owns U.S. Bank; however an indication that the bank's debit and credit card customers have been paying higher interest rates and greater fees and penalties. Despite an increase in credit card defaults, the bank earned $2 million more 1st quarter 2010; up 0.8 percent from same time last year.
U.S. Bancorp wrote off 6.32 percent more 1st quarter 2010 than same time last year, amounting to 7.73 percent of the bank's total credit card loans. The company's cardholders are not alone in dealing with interest rate and fee increases. Major competitors of U.S. Bancorp including JPMorgan Chase & Co., Bank of America, Citibank, and Capital One have all reported increases in debit and credit card income as well. Overall, U.S. Bancorp realized a net income of $699 million for the first quarter 2010; a whopping 26.5 percent increase from last year's $529 million.
Net revenue for first quarter 2010 brought $4.3 billion to U.S. Bancorp's profit and loss; and increase of 10.3 percent from the previous year. In a conference, Andrew Cecere, U.S. Bancorp's Vice Chairman and Chief Financial Officer said that in addition to debit and credit card earnings, the bank's total revenue also includes corporate payment products and automatic teller machine (ATM) card processing. Corporate payment products revenue rose to $168 million up from $154 million same time last year; a 9.1 percent increase. Interchange fees increased as well to $292 million up from $258 million 1st quarter 2009; a 13.2 percent increase. Card ATM processing fees increased by $3 million up to $105 million; a 2.9 percent increase from same time last year.