U.S. Bancorp and Wells Fargo, two of Minnesota’s largest banking and financial services companies, finished the year strong with solid revenues. U.S. Bancorp, the fifth-largest bank in the country, reported a full-year profit increase of 2.5 percent, earning $5.21 billion in revenue; while Wells Fargo, the state’s largest bank and the world’s largest bank based on market value, earned a total of $21.6 billion in revenue.
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While both companies attributed their success to growth in loans, deposits, and income, there was a slight difference in the way they achieved profits. Wells Fargo, which surpassed Citygroup Inc. as the country’s third biggest banking company according to assets, focused on asset acquisition. U.S. Bancorp, meanwhile, extended its competitive advantage by reaching positive operating leverage, an indication of the firm’s efficiency in growing its revenue faster than its expenses.
In the wake of the industry’s low-interest rates, modest economic growth and regulations, U.S. Bancorp chief executive Richard Davis noted that the company’s overall performance is remarkable. He also expressed optimism for 2016 saying, “I’m concerned less about the rate itself than the fact that rates moving up will continue to reflect that the Fed believes the economy is stronger.”
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