More positive sentiment towards US banks Upbeat sentiment toward bank stocks continued Wednesday as U.S. Bancorp and Citizens Financial Group Inc. both rose on mostly positive quarterly results.
U.S. Bancorp USB, the larger of the two names, saw its stock rise nearly 5% after it reported second-quarter profit of 97 cents a share, two cents above the FactSet consensus estimate.
U.S. Bancorp’s second-quarter revenue of $6.9 billion beat the analyst estimate by $100 million as the company reported “healthy” growth in deposits, along with “continued momentum in leveraging our diversified fee income platform to deepen relationships.”
Citi analyst Keith Horowitz said U.S. Bancorp’s core preprovision net revenue beat expectations due mostly to net interest income on securities purchases and higher cash balances, while expenses and fees mostly matched estimates.
Including Wednesday’s gains, U.S. Bancorp’s stock is up 11.2% in the past week, as banks reported healthy second-quarter profits and as expectations of lower interest rates boosted prospects for more demand for loans and lower cost of capital.
By comparison, the S&P 500 SPX is down 0.6% in the past week and the Financial Select Sector SPDR exchange-traded fund XLF has risen 4.2% in the past week.
Speculation about less bank regulation on what are seen as improved chances in recent days of Republican nominee Donald Trump winning the White House has also lifted bank stocks.