Smaller-than-expected decline of 76% for US Bancorp in Q2

US Bancorp, one of the 10 largest US banks, yesterday said second-quarter profit fell 76 per cent, a smaller decline than expected, as the deteriorating economy drove credit losses higher. The results show how the recession and credit crisis have not spared even lenders considered relatively conservative. US Bancorp's mix of businesses is less directly exposed to the health of consumer borrowers than that at many rivals. Second-quarter net income applicable to common shareholders of the Minneapolis-based bank fell to $221 million (Dh811m), or 12 cents per share, from $926m, or 53 cents, a year earlier. Net revenue rose nine per cent to $4.16bn. Analysts on average expected profit of 10 cents per share on revenue of $4.02bn, Reuters Estimates said. Results included charges per share of eight cents tied to the repayment of a government bailout and five cents to replenish a federal deposit insurance fund. US Bancorp set aside $1.4bn for credit losses in the quarter, and net charge-offs totalled $929m, both more than twice the year-earlier levels. It said the increases reflected falling home prices and the impact of a deteriorating economy on commercial, commercial real estate and consumer loans. The bank said results benefited from record mortgage lending of $16.3bn, which caused mortgage banking revenue to more than triple. Overall fee revenue increased nine per cent, while net interest income increased 10 per cent. Net interest margin was 3.60 per cent, little changed from the first quarter and a year earlier. In June the bank repaid $6.6bn taken from the federal Troubled Asset Relief Program after regulators found under a "stress test" that it had no capital shortage. The bank has said it plans to expand, having acquired the failed California lenders Downey Financial and PFF Bancorp and the deposits of the failed Bank of Idaho since November. Keep up with the latest business news from the region with the Emirates Business 24|7 daily newsletter. To subscribe to the newsletter, please click here .