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.
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.