U.S. Bancorp announced Wednesday that it will cut its quarterly dividend by 88 percent to 5 cents per common share, a reduction of 37.5 cents from the same period last year.
The Minneapolis-based bank holding company expects the reduction to preserve more than $2.6 billion annually.
“The decision to reduce our quarterly dividend was thoughtfully considered and very difficult, given the importance of the dividend to our shareholders,” Chairman, President, and CEO Richard K. Davis said in a statement. “It was, however, the right decision, as our industry continues to confront uncertainty in the financial markets and a weakening economy.”
Although the banking industry as a whole continues to struggle, Davis said that the company was well-capitalized with a Tier 1 capital ratio of 10.6 percent at the end of 2008.
Davis also said that U.S. Bancorp would resume issuing its regular dividend as soon as possible.
U.S. Bancorp is the largest bank holding company in Minnesota based on assets, which total $266 billion. It is the parent company of U.S. Bank, the sixth-largest commercial bank in the nation.
