M&T Bank posted better-than-expected quarterly profit as commercial lending grew but said consumers' increasing reluctance to borrow may cut loan growth in 2005.
Many big US banks have credited the consumer with driving higher profit over the last several quarters. M&T is the first of the 20 largest banks to report fourth-quarter results. Its shares fell more than 2 per cent in early trading.
Chief financial officer Mr Michael Pinto said in a conference call that while companies are demanding more credit, consumer loan growth was "flat" in the fourth quarter.
He added that continued increases in short-term interest rates might reduce margins in 2005. M&T, based in Buffalo, New York, said fourth-quarter net income rose 15 per cent to $192.2 million, or $1.62 per share, from $166.9 million, or $1.35 per share, a year earlier.
Allied Irish Banks sold its troubled Allfirst subsidiary to M&T for $3 billion following the Ruznak affair.
Lending income rose 5 per cent to $446.3 million, while fee income rose 2 per cent to $237.6 million. Noninterest expense such as salaries and equipment fell 4 per cent to $361.9 million. Deposits rose 7 per cent to $35.4 billion, and assets rose 6 percent to $52.9 billion.