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UPDATE: This article includes additional information from U.S. Bancorp's earnings call and comments from an interview with company CFO John Stern.
Gunjan Kedia projected confidence on Wednesday that U.S. Bancorp is moving in the right direction, as the company seeks to accelerate its growth and restore investors' optimism.
One day after taking the helm as CEO of the Minneapolis-based parent of U.S. Bank, Kedia told analysts that she has three immediate priorities — well-controlled expense management, organic growth across the organization and the transformation of the company's payments business.
She also reiterated all of the financial targets that the company shared in September during its first investor day in five years, and said that investor confidence was paramount to moving forward.
Kedia was candid about U.S. Bancorp's stock price, which is down about 20% year to date, and was down about 1.9% on Wednesday during midafternoon trading.
In response to a question from an analyst about what she will do differently as the new CEO to achieve better financial results, Kedia admitted she was "not happy" with the stock performance.
Expense discipline "needs to come back," and the bank needs to "build out the organic growth muscle," Kedia said. U.S. Bancorp also needs "a different level of urgency around execution," she added.
"We're very confident that the results will be better going forward," she said.
U.S. Bancorp, which has been criticized for underachievement, is showing signs of progress toward better financial performance. During the first quarter, the $676.5 billion-asset company improved profitability and efficiency ratios compared with the year-ago period and boosted its capital position. It also grew fee income, which makes up 41% of its total net revenue. And it reduced noninterest expenses by 5% year over year on a nonadjusted basis.
The company is sticking with its financial targets for 2026 and 2027, including a return on assets of between 1.15% and 1.35% and a return on tangible common equity in the mid-teens. For the first quarter, return on assets came in at 1.04%, while the return on tangible common equity was 17.5%.
The company's efficiency ratio was 60.8%, higher than the low-50s target shared in September.
Against an uncertain macro-economic backdrop driven by tariffs, U.S. Bancorp is also standing by its full-year 2025 guidance. Net revenue is still expected to grow between 3% to 5%, and the firm continues to forecast positive operating leverage for the full year, it said Wednesday.