U.S. Bank's CEO disavows cross-selling during 3Q earnings call
Cross-sell? The concept apparently is foreign to Richard Davis, chairman and CEO of U.S. Bancorp.
"Honest to God, I've never ever looked at the number," he said during an earnings call on Wednesday. "We don't measure that. We don't set quotas."
What the bank does instead, he said, is ask employees to make sure customers know what products and services the bank offers so that when their "life cycle" needs change, "they'll ask us for it."
"People buy our products," he said. "We don't sell them."
Its non-aggressive stance on cross-selling certainly didn't hurt its wealth management businesses.
The bank generated $538 million in third-quarter revenue from wealth management and securities services, up a notable 17.5% from the same period a year ago and up 2.9% from the prior quarter. For the first nine months of 2016, the business line reeled in $1.5 billion,
up 15.2% year-over-year.
Third-quarter profits were even more impressive, soaring 58.3% to $95 million from $60 million a year ago. For the first nine months, wealth management and securities services earned $274 million, a startling 56.6% increase year-over-year.
The year-over-year revenue growth was due in part to an increase in trust and investment management fees, reflecting the impact of lower money market fee waivers, growth in assets under management and improved market conditions, the bank said in the earnings release.
The bank's wealth management and securities services are delivered through five distinct
businesses, including U.S. Bancorp Wealth Management. The services range from private banking, investment and retail brokerage to financial advisory, insurance, trust, custody and fund servicing, according to the earnings release.
Of the five businesses, U.S. Bancorp Wealth Management tied with Corporate Trust as the top revenue generator, bringing in $187 million, or 34.8% of the total $528 million posted. Revenue from wealth management was up 5% year-over-year and up 2.7% from the prior quarter.
The new CIO will direct U.S. Bank Wealth Management's Asset Management Group and lead its investment management business strategy and policies.
Overall, U.S. Bank's parent company earned $1.5 billion, or 84 cents per diluted common share, in the third quarter, compared with $1.5 billion, or 81 cents per diluted common share, in the same quarter a year ago.
"I'm very pleased with our third-quarter results," Davis said on the call. "Industry leading profitability was supported by solid loan and deposit growth and broad-based core revenue growth."