April 15 (Reuters) - U.S. Bancorp reported a 13.6% jump in first-quarter profit on Thursday, driven by higher interest income and fee revenue.
Loan growth has been quite strong across the industry in recent months as a string of rate cuts by the U.S. Federal Reserve in the second half of 2025 encouraged businesses and consumers to take on more debt.
Net interest income — the difference between what a bank earns on loans and pays out on deposits — rose 4.2% to $4.26 billion in the quarter from a year earlier, underpinned by robust loan growth and record consumer deposits.
"Credit quality and capital levels remain healthy and strong," CEO Gunjan Kedia said in a statement.
Fee revenue was also a bright spot. It surged 6.9% in the quarter as the bank benefited from robust capital markets activity.
Capital markets revenue surged 29% to $377 million in the quarter from a year earlier, driven by strong client-related derivative activity and corporate bond underwriting fees.
The fifth-largest U.S. lender's profit was $1.95 billion, or $1.18 per share, in the three months ended March 31, compared with $1.72 billion, or $1.03 per share, a year earlier.
The bank said it has limited exposure to business development companies (BDCs), with structural protections across the portfolio.
BDCs are investment vehicles that give investors access to private credit assets.
Wall Street banks have ramped up their disclosures on exposure to non-bank lending in recent months after the high-profile bankruptcies of U.S. auto parts supplier First Brands and car dealership Tricolor last year raised concerns around credit quality.
The Minneapolis-based bank last month bagged the mandate to be the issuer of two small business credit cards that Amazon is set to relaunch this spring.
Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Sahal Muhammed
Source: Reuters