U.S. Bancorp reported record net income of $1.7 billion for the second quarter on record net revenue of $5.6 billion, and corporate payments growth stood out as a key driver.
Corporate payment sales volume was up 11.7% during the quarter ended June 30, compared with the same period a year ago, almost doubling activity for business that includes commercial and digital payments, T&E and fleet card spending, said U.S. Bank’s CFO Terry Dolan during a conference call with analysts.
"It's worth noting that this quarter marks the best revenue growth performance in corporate payments in over seven years," Dolan said.
Within the corporate payments segment, government spending—which includes U.S. government contracts for the fleet cards U.S. Bank handles through its Voyager unit—also rose sharply.
“Government spending was up 9.8% in the second quarter compared to relatively flat or down last year,” said Andy Cecere, U.S. Bank’s CEO, during the conference call.
U.S. Bank’s payments services segment overall contributed $361 million in net income during the quarter, up 28% from $282 million during the same quarter a year ago on total new revenue of $1.5 billion.
Payment services accounts for about 30% of U.S. Bank’s overall banking operations, Cecere told analysts in June during a conference organized by Morgan Stanley in New York.