Despite losing $84 million on automotive leases last quarter, US Bancorp remains committed to the auto financing business, its top executive said yesterday.
Richard K. Davis, the chairman, president and CEO of US Bancorp, emphasized during a presentation on the company’s performance and plans that auto finance remains in the bank’s strategy.
“We have been in the auto finance business since 1953 and we are going to stay active,” Davis said.
The reaffirmation deserves notice because US Bancorp is one of the most diligent managers of risk in the banking business. It does not take a loss of $84 million lightly. The loss was the leading reason why the bank’s noninterest income fell 0.4% last quarter after four quarters of solid expansion.
Davis said the auto finance business is being adversely affected by consumers holding their cars longer. He said the business would “make money in the future.”
US Bancorp had $14.3 billion of auto loans and leases outstanding at the end of last quarter. The bank’s auto loan chargeoffs climbed to 1.11% last quarter from 0.72% in 2Q08.
