Minnesota-based U.S. Bancorp (USB) is pondering “the future of the branch,” says Vice Chairman/Chief Financial Officer Andrew Cecere, as the company moves toward the cutting edge. He was speaking at the 33rd annual BancAnalysts Association of Boston Conference held at the Langham Hotel.
Mobile banking at U.S. Bank now has 2.7 million active customers, making it the second most frequently accessed channel at U.S. Bank, Cecere said.
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Surprisingly, U.S. Bank has an expectation that the number of branches will remain the same in the future. “But they will be smaller, with less tellers, more sales,” said Cecere.
“People are migrating. As we think of our branch structure, we want to be able to service and sell,” Cecere said. Branches, however, will still be the “number one source of deposits.” The branch of the future will be “structured to optimize all channels,” Cecere said.
U.S. Bank is the fifth-largest U.S. bank in assets, deposits and market value, according to SNL. The company has $391 billion in assets with deposits of $273 billion. It also has $246 billion in loans and 17.9 million customers, with a market cap of $76 billion. It is primarily in the Midwest and West, serving 25 states.
It offers payment services; wealth management and securities services; wholesale banking and commercial real estate; and consumer and small business banking. “We are in all the businesses we want to be in,” Cecere said, noting revenue is derived “half from the balance sheet and half from fee income.”
Cecere touted U.S. Bank’s single processing platform, noting that any prior acquisitions are always fully integrated and that efficiency initiatives are conducted “every month, business line by business line.”
U.S. Bank’s 3Q 2014 year-to-date profitability was reported as ROE 14.7%, ROA, 1.56%, with an efficiency ratio of 52.8%, Cecere said.
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