US Bancorp sees annual net interest income below Wall Street estimates, shares fall
8:23 am Wednesday, July 19th, 2023
(Reuters) – US Bancorp forecast full-year net interest income (NII) below Wall Street estimates, sending the lender’s shares down more than 1% in premarket trading on Wednesday.
The weak forecast comes despite lenders earning more in interest income, thanks to a sharp rise in interest rates by the Federal Reserve to tame decades-high inflation.
Minneapolis-based US Bancorp now expects full-year NII, which measures the difference between what banks earn on loans and pay out on deposits, to be between $17.5 billion and $18.0 billion. Analysts on average expect $18.1 billion, according to Refinitiv data.
The bank’s NII for the quarter ended June 30 rose to $4.45 billion, compared with $3.46 billion a year ago.
On an adjusted basis, US Bancorp reported profit of $1.12 per share, in line analysts’ expectations.
Its total average deposits were at $497.27 billion, down 2.6% sequentially and up 9% over a year earlier.
The lender also set aside $821 million as provisions for bad loans in the quarter, compared with $311 million a year ago.
(Reporting by Jaiveer Singh Shekhawat in Bengaluru; Editing by Shilpi Majumdar)
