U.S. Bank continued its multiyear strategy to invest in e-commerce and tech-led revenue efforts in the first quarter of 2023.

Tech-led merchant processing fee revenue growth, for example, increased 12% year over year and 56% sequentially.

THE BIG PICTURE: Tech-led merchant processing includes digital, omni-commerce and e-commerce revenue channels, according to today’s earnings presentation.

Investment in digital channels has been an ongoing effort to drive revenue growth, Terry Dolan, vice chair and chief financial officer, said during the bank’s Q3 2022 earnings call in October.

BY THE NUMBERS: U.S. Bank posted in Q1:

• Net revenue increased 29% to $7.2 billion;
• Technology and communications spend increased 19% YoY to $503 million; and
• Noninterest expenses increased 30% YoY to $4.6 billion.

NOTEWORTHY: U.S. Bank completed the acquisition of MUFG Union Bank in December, and main systems will be fully converted with U.S. Bank by May, according to the earnings presentation. The plan for Union Bank includes new U.S. bank credit cards to be issued in June and July, and trust and investment accounts to be transitioned to U.S. Bank by the end of 2023.

“Integration efforts have been progressing well and we remain on track for a successful main systems conversion over the upcoming Memorial Day weekend,” Chief Executive Andy Cecere said during today’s earnings call. “We bring out enhanced digital capabilities and broad and diverse product sets to the Union Bank customer base.”

FLASHBACK: In Q1, the bank launched automated direct deposit switching capabilities in partnership with fintech Atomic for its U.S. Bank Smartly Checking or Safe Debit deposit clients, according to a February U.S. Bank release.

Bank clients can set up payroll direct deposit through Atomic and “instantly receive confirmation that the payroll direct deposit has actually been successfully switched,” Jonathan Burns, senior vice president of digital sales at U.S. Bank, previously told Bank Automation News, noting that the solution eliminates human approvals and paper forms.

MARKET REACTION: U.S. Bank’s stock was up 2.3% to $36.01 at market close today, compared with $35.19 at market close Tuesday.