Profit growth was also hurt by weakness in the California economy and weak loan demand.

Some, however, are skeptical that a cut will stimulate loan demand.

The company said economic recovery in California helped loan demand.

Because loan demand is low, banks have too much money sitting idle.

"We're looking for a pickup in loan demand and think they'll do very well," he added.

But with Japan in the second year of a recovery, loan demand may pick up.

They said that bank profits would also be hurt by weak loan demand.

Still, loan demand at big companies remains soft, he warned.

When that business slows down, as it has, loan demand is sharply reduced.

Such loan demand, however, has little relationship to what is actually happening in the economy.