U.S. Bank is seeing operational efficiencies as it deploys AI and invests in technology. 

“We are maintaining our expense discipline through sustainable process automation and we are executing on our payments transformation with greater focus and strategic investments,” Chief Executive Gunjan Kedia said during the bank’s third-quarter earnings call today. “The outcomes of our efforts have been quite successful, as we have seen steady improvement to both the efficiency ratio and positive operating leverage as adjusted.”

The $671 billion bank reported an efficiency ratio of 57.2% compared with 60.2% in Q3 2024, an improvement of 4.9%, according to the earnings report published today.  

U.S. Bank attributed improved efficiencies to: 

• AI and automation; 

• Real estate rationalization; 

• Organization simplification; and 

• Re-investment in technology and digital capabilities. 

Through cost savings and restructuring, the bank has been able to bring its efficiency ratio below its operating leverage, according to the report. Operating leverage accounts for fixed costs that don’t change with production volume — branches, for example 

The bank reported an operating leverage of 530 basis points, up from 30 basis points in Q3 2024, according to the bank’s earnings presentation. 

AI in action and the numbers 

The Cincinnati-based-bank has deployed AI in: 

• Underwriting loan applications;  

• Spend management tools; 

• branches for bankers; and 

• An assistant for customer service representatives. 

During the quarter, U.S. Bank reported: 

• Net revenue of $7.3 billion, up 7.3% year over year; 

• Tech expense of $560 million, up 6.9% YoY; and 

• Compensation and benefit expenses of $2.3 billion, down 2.9%. 

Bank of America stock was up 1.5% to $45.77 from market open today. The bank has a market capitalization of $72 billion. 

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