Here's the Big Opportunity I See in U.S. Bancorp's Q3 Earnings
\U.S. Bancorp (NYSE: USB) generated solid earnings in the third quarter, with $1.30 diluted earnings per share on total revenue of nearly $5.9 billion. Both numbers beat estimates from analysts.The results were fine, although loan growth continues to be muted.
But beyond the numbers, my biggest takeaway from earnings came when management divulged more information about how the bank will further integrate its payments business into the commercial bank, a big part of its strategic vision and something that could be a significant driver of revenue over the next few years.
U.S. Bancorp, which has $567 billion in assets, has achieved a strong valuation with a differentiated business model that includes a strong traditional banking operation and a more niche payments business that contributes roughly a quarter of the bank's overall profits. U.S. Bancorp's payments business serves a range of clients. The unit has retail payment solutions offering credit, debit, and prepaid cards. It also serves businesses in the hotel and airline industries with its global merchant acquiring technology, as well as corporations and businesses in the aviation, fleet, transportation, and travel industries with corporate card and payments services.
Source Fool.com
