U.S. Bancorp's Richard Davis says banks are still fighting for their reputation

The leader of the nation's best-performing big bank, U.S. Bancorp Chief Executive Richard Davis, said the industry is still clawing back its reputation after driving the economy to near collapse eight years ago.

Pressed by an analyst on Wednesday to discuss the effect of Wells Fargo & Co.'s fake-accounts scandal, Davis suggested without mentioning Wells by name that the episode is another hurdle for an industry that has been poorly regarded since the 2008 global economic crisis.

"People love their banker, they like their bank. ... They don't so much like the industry," Davis said while discussing the bank's third-quarter results. "We're sadly years away from getting that right. But if every banker does a better job, despite what happens on occasion in one location or another, we've got a fighting chance to bring this thing back."

Davis said Minneapolis-based U.S. Bancorp, which runs the nation's fifth-largest bank, did not make a high priority of "cross-selling" services to customers, the practice that led Wells Fargo employees to open fake accounts in order to hit internal performance targets.

"I don't even know what the cross-sell is at this bank. Honest to God, I've never ever looked at that number," Davis said. "I would guess it's between two and four because nobody at any part of their life needs more than two to four services from a bank."

He added that U.S. Bank doesn't set quotas on employees.

"What we do, instead, is to ask our employees to make sure people know what we have, so that if their life needs change, and we're a trusted partner, they'll ask us for it," Davis said.

Davis called the results "solid" and noted the industry remains under pressure from low interest rates and slow economic growth. U.S. Bancorp shares rose 1.3 percent.

Asked whether the outcome of the election would make a difference on industry regulation, Davis said he didn't think so. "I don't see any circumstances where bank regulation gets easier, or lightens. I don't see a significant place where it gets any tougher or gets a lot stronger," he said.

The Wells Fargo scandal prompted one federal regulatory agency to look at sales incentives at banks. "I do think there is going to be a need for us to respond to this current issue on culture and doing the right thing. That makes sense to me and that's a place where we will welcome that oversight," Davis said.

Banks still need to grow by reaching out to customers, he said. "I want to make sure it's clear though, for this industry, selling is not bad," Davis said. "It's not bad anywhere as long as you're selling to people's needs and you're making it clear what advantages you have to provide at the time they need them."

U.S. Bank earned $1.5 billion, or 84 cents a share, in the July to September period, up from $1.49 billion, or 81 cents a share, a year ago. Revenue, which had been expected to be flat to slightly lower, grew 4.7 percent to $5.39 billion, the company said.

The company's loan portfolio grew 7.6 percent, led by a 9 percent jump in commercial loans and a 15 percent jump in credit cards, helped by the acquisition of a card portfolio from Fidelity Investments earlier this year.

U.S. Bancorp leads other big banking firms with a return on average assets of 1.36 percent. Nearly 80 percent of its third-quarter profit amount was paid to shareholders in dividends and share buybacks.

Evan Ramstad • 612-673-4241