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U.S. Bancorp, PNC Post Higher Net Income as Loan Losses Ease

U.S. Bancorp and PNC Financial Services Group Inc. (PNC), ranked among the 10 largest U.S. commercial banks, said profit in the second quarter after setting aside less money to cover bad loans.

U.S. Bancorp, the fifth largest lender, said its 57 percent increase in net income was helped by a 50 per cent in the allowance for losses. His action won up 4.8 percent in New York trading. PNC, ranked sixth, said profits rose 14 percent after slashing the provisions of two-thirds.

"Everyone built these enormous reserves during the crisis and despite the recovery macro is quite low, credit trends, particularly the largest banks, are improving," R. Scott Siefers, an analyst at Sandler O'Neill & Partners LP in New York, said today in an interview. "Almost every business I had a much lower than expected disposal."

Lenders are draining the reserves due loans and defaults drop of records during the recession. As the income increases, which the bankers JPMorgan Chase & Co.CEO Jamie Dimon said this is not the same "quality" earnings. Investors focused instead on metrics such as revenue, with Minneapolis-based U.S. Bancorp reported an increase of 3.8 percent and Pittsburgh PNC posting a decline of 7.9 percent.

U.S. Bancorp advanced $ 1.01, or 4 percent, to $ 26.04 at 10:06 New York Stock Exchange. The stock is down 3.5 percent in 2011. PNC slipped 25 cents to $ 55.58, down 8.5 percent for the year.

Profit at U.S. Bancorp, led by Chief Executive Richard Davis, 53, was 1.2 billion, or 60 cents per share.Average total loans increased by 4 percent a year earlier, and net interest income increased 5.6 percent.

"We expect net assets charge-offs and unproductive to be lower in the third quarter of 2011 and expects to once again, releasing the reserves if current trends and outlook for long-term credit are positive, "Davis said in a statement.

PNC, led by CEO Jim Rohr, 62, earned $ 912 million, or $ 1.67 per share. The bank in June agreed to pay $ 3.62 billion in cash and shares of Royal Bank of Canada to the U.S. unit retail banking and other credit card assets.

PNC to benefit existing retail business swung to a $ 44 million second quarter loss of profit of $ 18 million over the first three months of 2011. He won $ 80 million in the period of the previous year. Net interest income fell 12 percent to $ 2.2 billion.