Fifth Third’s fee income, lending decline

Profits at Fifth Third Bancorp fell sharply in the fourth quarter, mostly because of a one-time item but also due to a broad-based decline in fees.

The $142 billion-asset company earned $395 million, or 40% less than a year earlier. Earnings per share were 49 cents, beating an estimate of analysts polled by Bloomberg by 6 cents.

fifth-third-branch

Noninterest income fell 44% to $620 million primarily because of gains recognized in the prior year from sales of shares in the payment processor Vantiv.

Still, excluding Vantiv, noninterest income declined 2% to $608 million due to lower fees from service charges, corporate banking, wealth management and mortgage banking.

Net interest income rose 1% to $909 million, while the net interest margin increased 1 basis point to 2.86%. The provision for loan losses fell 41% to $54 million.

Meanwhile, total loans declined 1% to $93 billion. The Cincinnati company continued to pull back on auto lending, and also exited certain commercial and industrial loans that “did not meet risk-adjusted profitability targets,” according to a Jan. 24 press release.

Noninterest expenses were $960 million, or flat from the prior year, as higher compensation overshadowed lower technology and occupancy costs.

For reprint and licensing requests for this article, click here.
Earnings Commercial banking Banking Non-interest income Fifth Third Bancorp Ohio
MORE FROM AMERICAN BANKER