U.S. Bancorp quarterly profit jumps on higher fee income

US Bancorp

16/10/2025 13:19

Oct 16 (Reuters) - U.S. Bancorp USB.N reported an 18% jump in third-quarter profit on Thursday as a resurgence in capital markets activity and higher valuations increased fee income at the fifth-largest U.S. bank.

Fee income, which accounts for over 40% of the bank's total revenue, jumped 9.5% in the quarter.

Capital markets fees surged 9.3% due to higher corporate bond underwriting and syndication, and trust and investment management fees jumped 9.4%.

INTEREST INCOME BEATS EXPECTATIONS

Net interest income — the difference between what banks earn on loans and pay on deposits — rose 2.1% to $4.22 billion in the quarter from a year earlier, exceeding management expectations.

"Overall, strong quarter with better than expected NII which should give market increased confidence in improvement story," Citigroup analyst Keith Horowitz said.

Net interest margin, a key measure of how profitably a bank lends, rose to 2.75% in the quarter from 2.74% a year earlier.

The lender forecast interest income to be relatively stable in the fourth quarter compared with the third quarter. In the last quarter, it had sold loans and rejigged its bond investment portfolio to increase the interest income.

U.S. Bancorp also reported an 18.6% return on tangible common equity (ROTCE) - a closely watched profit metric - in the third quarter.

Net income applicable to U.S. Bancorp shareholders jumped to $1.89 billion, or $1.22 per share, in the three months ended September 30, compared with $1.60 billion, or $1.03 per share, a year earlier.

With the stock lagging peers in recent years, the bank has been focusing on stabilizing expenses, organic growth and boosting profits in its payments business.

The Minneapolis, Minnesota-based bank's shares rose 2.1% in premarket trading.

 (Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Sahal Muhammed)

 ((ArasuKannagi.Basil@thomsonreuters.com;))