U.S. Bancorp's chairman and chief executive said the bank may
have to cut jobs if interest rates don't rise as expected, a move
the lender has resisted so far.
"If we're wrong and rates actually aren't going to move
up…trust me, we will cut expenses," Richard Davis said
at an investor conference in Manhattan on Thursday morning. Job
cuts could be part of those expense cuts, he said.
There are no current plans to cut jobs, in part because the
Minneapolis-based bank expects rates to start rising in September
or December and because of the effect the move could have on
morale, Mr. Davis said. The bank's head count was 67,000 in 2014,
according to its annual report, a figure that was unchanged from
the prior year.
Like other regional banks, U.S. Bancorp has faced a tough
environment in which low interest rates have limited interest
income and have pushed down net interest margin, a key
profitability metric. Analysts say the bank currently has very low
expenses when compared with its revenue.
Separately, Mr. Davis said the bank isn't eager to buy other
banks, in part because of the regulatory and compliance risks.
"I'll take pieces and parts, but not whole parts," he said.
For instance, the bank is interested in some of the assets being
sold by General Electric Co. as a part of its plan to scale back
its finance arm. But U.S. Bancorp would only pursue lines of
business it is already in, Mr. Davis said.
Write to Rachel Louise Ensign at rachel.ensign@wsj.com
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