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After the United Kingdom's surprising vote to exit the European Union, the financial markets are in turmoil and U.S. banks are left trying to assess their risks.
June 24 -
Resolution plans put in place following the financial crisis have made big banks expert at contingency planning. Nonetheless, bankers here are keeping their fingers crossed that Britain will remain in the European Union.
June 21 -
The U.K.'s surprise vote last week to leave the European Union has upped the ante for the banks taking part in the Federal Reserve Board's second round of stress tests on Wednesday.
June 27
Maybe Brexit isn't all bad news for big banks.
U.S. Bancorp could see a slight uptick in revenue in its payments business after the U.K.'s decision to leave the European Union, Chief Executive Richard Davis said on a conference call Friday.
The Minneapolis company has expanded its merchant-acquiring business across Europe in recent years. Though the business is based in the U.K., Davis isn't sweating the June 23 vote, which took the market — and the world — by surprise.
"There's a lot of prognosis that … there will be a lot more travel and visits and spending over in the U.K., which is a net positive for us," Davis said.
The company's European payments business is heavily focused on hotels and airlines, Davis said. It generated about $2 billion in operating cash in 2015, according
The business could benefit from additional travel in the region — particularly if the value of the pound stays low and vacations to London remain
"That could be quite positive," Davis said, though he added that the impact would be "pretty neutral" for the company overall.
Over the long term, however, U.S. Bancorp faces some of the same potential headaches as its major rivals.
Like other big banks — such as JPMorgan Chase and Bank of America — U.S. Bancorp benefits from "passport" privileges that allow it to operate freely across the EU bloc.
The company has "a few hundred employees" who work in the U.K. It remains to be seen whether the company will need to reconfigure its operations, Davis said.
By comparison, JPMorgan has about 16,000 employees in the U.K. Citigroup and Bank of America each have several thousand employees in the country.
U.S. Bancorp also offers corporate trust services in Europe. Despite seeing a recent "tick down" in deals, the company said it expects that business to grow in the coming months as rates remain low.
Still, despite the recent turmoil, Davis projected a sense of measured cool when asked about potential changes to its European businesses.
"There's no rush to it," he said.
