U.S. Bancorp Cuts Earnings Expectations

U.S. Bancorp lowered its profit expectations on Thursday, conceding that a tough environment for bank earnings is likely here to stay.

The Minneapolis-based lender took its expectations for return on assets and return on equity down a notch during a presentation at its Investor Day event after low interest rates and a slow economic recovery led the bank to fall short of its goals for these metrics in recent years.

The bank cut its long-term return-on-assets target to between 1.35% and 1.65%, from between 1.60% and 1.90%, a goal set in 2013; and its return-on-equity target to between 13.5% and 16.5%, from between 16% and 19%. From 2013 and 2015, the bank's return on assets was 1.54% and the return on equity was 14.8%.

At the same time, the bank's profitability as measured by these metrics is better than other national and large-regional banks, according to U.S. Bancorp.

Bank executives said they were prepared to deal with low interest rates and a flatter yield curve, which both tend to make banking less profitable. "We're grinders," said new Chief Financial Officer Terry Dolan.

(END) Dow Jones Newswires

September 15, 2016 16:45 ET (20:45 GMT)

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