US Bancorp earnings down 65%

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Profits at US Bancorp, a large regional bank, fell by 65 per cent in the fourth quarter, dragged down by credit and securities losses.

Net income for the Minnesota-based bank, the sixth largest commercial bank in the US, declined to $330m, or 15 cents a share, in the fourth quarter, from $942m, or 53 cents a share, during the same period in the previous year. Last quarter saw the bank’s eighth consecutive fall in profits.

Shares of US Bancorp plunged 14.21 per cent to $13.16 in late morning trading on Wednesday.

“Although we were able to absorb the increased cost of credit and market-related write-downs, I am disappointed with the overall decline in this quarter’s earnings,” Richard Davis, US Bancorp’s chief executive, said in a statement.

In the fourth quarter US Bancorp notched $253m in securities losses and recorded a $653m provision for credit losses.

Last November US Bancorp acquired Downey Savings and Loan and PFF Bank and Trust from the Federal Deposit Insurance Corporation. The addition of 213 branches from those acquisitions boosted deposits by $19bn, or 15.2 per cent, in the fourth quarter.

Also in November the bank received a $6.6bn infusion through the government Troubled Asset Relief Programme (Tarp) in exchange for an equity stake.

“As I have said many times over the past year, US Bancorp is ‘open for business’”, Mr Davis said.

US Bancorp has $266bn in assets and operates 2,791 branches.

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