C&I and consumer loans fall, but Fifth Third's profits still rise 13%

Profits at Fifth Third Bancorp in Cincinnati rose in the second quarter as lower costs and higher interest rates offset a decline in lending.

The $141 billion-asset company reported earnings of $344 million, or 13% more than a year earlier. Earnings per share were 45 cents, or two cents higher than the consensus among analysts’ estimates compiled by FactSet Research Systems.

fifth-third-branch

Noninterest expenses fell 3% to $957 million. The declines occurred almost across the board; lower salaries, occupancy and technology-related expenses were among the contributors.

The recent hikes in short-term interest rates also boosted profits, pushing up the net interest margin by 13 basis points to 3.01%. Net interest income rose 4%, to $945 million.

Average loans, however, dipped 2% to $91.9 million thanks in part to a 5% decline in commercial and industrial lending. Certain types of consumer loans — including credit cards and auto loans — also declined.

Fee-based income fell 6%, to $564 million on lower corporate and mortgage revenue as well as other factors.

For reprint and licensing requests for this article, click here.
Earnings Commercial lending Expense management Interest rates Net interest margin Fifth Third Bancorp
MORE FROM AMERICAN BANKER