SunTrust Banks’ profits fell in the final quarter of 2016 and for the full year as higher costs and set-asides for loan losses outstripped higher revenue.
The Atlanta bank’s results were still better than analysts expected, beating the average estimate.
Last year “was the fifth consecutive year in which we grew earnings per share, improved efficiency, and increased capital return,” SunTrust CEO William Rogers said.
Rogers said he is confident SunTrust will “continue (its) positive financial performance trajectory” in 2017 because of the healthy economy and cost-cutting moves such as closing bank branches.
SunTrust shares rose on Friday and, like those of other big banks, have surged since Donald Trump's election fed investor optimism.
Georgia’s largest bank did not have the kind of heady Wall Street trading profits that have helped some bigger banks in the wake of Trump’s election, however.
Earlier this week, Morgan Stanley said fourth-quarter profit surged 84 percent, to almost $1.7 billion, partly thanks to post-election trading. J.P. Morgan and Bank of America likewise benefited from a surge in trading activity after the election.
SunTrust, which has much smaller trading and investment banking operations arm, didn’t get a post-election boost in its bottom line.
SunTrust said fourth quarter profit fell 4 percent to $448 million. For the full year, profit fell 3 percent to under $1.9 billion. Quarterly profit amounted to 90 cents a share, vs. 88 cents projected by analysts.
SunTrust reported healthy revenue and loan growth, reflecting stronger economic growth in the region. But expenses also rose, and the bank set aside $101 million for potential loan losses, up from $51 million a year earlier.
SunTrust had 1,367 branches and 24,375 employees at the end of 2016, compared to 1,401 branches and 24,043 employees a year earlier.
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