SunTrust Banks said rising consumer lending and higher interest earnings on loans helped the Atlanta bank’s bottom line despite slowing demand from business customers.
Meanwhile, Georgia’s largest bank has been adding employees through internal growth and a 2016 acquisition, even though it is still shutting bank branches at a healthy clip.
SunTrust’s workforce has grown by more than 300 people over the past year, to 24,278, reversing a steady decline since the Great Recession.
But the bank is still shutting down branches as its customers do more and more business online. SunTrust shed more than 100 branches over the past year. It now has 1,281.
During the three months ending in June, SunTrust banked $528 million in profits, 7 percent higher than a year ago.
“We’re back, which is great,” said Aleem Gillani, SunTrust chief financial officer. He said by one measure — “core” earnings per share — the bank reported its highest quarterly results since 2007. The measure leaves out sporadic gains or losses such as regulatory fines or tax windfalls.
SunTrust’s revenue grew only 2 percent compared to the year-earlier quarter, to $2.3 billion, as a slowdown in mortgage re-financings and investment banking business tamped down non-interest sales.
Overall lending also grew by only 2 percent compared to a year earlier, despite stronger consumer loan volume, due to flat or weaker borrowing by businesses, commercial real estate borrowers and home equity loan customers.
Bank lending across the nation has slowed for most types of loans since the presidential election. Business lending declined in the first quarter and is still crawling at close to its slowest pace since 2011, according to recent Federal Reserve data.
Industry players say a mix of factors are affecting loan demand.
Businesses are in a wait-and-see mode after President Donald Trump’s proposals to repeal Obamacare and overhaul the tax code stalled in Washington, D.C.
Lenders and borrowers also are feeling the effects after the Federal Reserve raised target interest rates three times since late 2015, increasing borrowing costs.
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