CORRECTED-UPDATE 1-U.S. Bancorp's profit rises on mortgage refinancing
(Corrects paragraph 1 to clarify that profit rose 14 percent, not 16 percent, based on net income for common shareholders)
Oct 17 (Reuters) - U.S. Bancorp's third-quarter profit rose 14 percent as the fifth-largest U.S. commercial bank benefited from a surge in home loan refinancing.
Mortgage refinancing has been one of the bright spots for U.S. banks as they struggle with narrowing margins and weak consumer loan demand.
Analysts expect mortgage lending volume to continue to rise after the Federal Reserve said in September that it would buy up to $40 billion of mortgage bonds every month until the labor market improved materially.
JPMorgan Chase & Co and Wells Fargo & Co both posted record quarterly profits last week on the back of the improving mortgage market.
The Minneapolis-based bank said net income for common shareholders was $1.40 billion, or 74 cents per share, up from $1.24 billion, or 64 cents per share, a year earlier.
Mortgage banking revenue rose for the fourth straight quarter, more than doubling to $519 million.
"Our third-quarter earnings included continued strong mortgage banking activity, which contributed to our growth in fee income", Chief Executive Richard Davis said in a statement.
The bank has been bulking up its mortgage business at a time when large lenders like Bank of America have been pulling back.
Shares of U.S. Bancorp, which has a market value of about $64 billion, closed at $33.61 on Tuesday on the New York Stock Exchange. (Reporting by Jochelle Mendonca in Bangalore; Editing by Akshay Lodaya)
- Malaysia Airlines plane missing at sea off Vietnam, presumed crashed |
- China draws 'red line' on North Korea, says won't allow war on peninsula
- Warning shots fired to turn monitors back from Crimea |
- Malaysian plane crashed off Vietnam coast: state media