Fifth Third Bancorp Chief Executive Kevin Kabat says the banking industry is poised for significant consolidation and he told investors Wednesday that his company will be among the buyers.
Speaking at an investor conference in New York, Kabat said that the combination of stiffer regulations and weak demand for loans is taking a toll on smaller banks and could reach a "tipping point" in late 2012 or early 2013.
The $112.5 billion-asset Fifth Third, he said, is well positioned to take advantage of acquisition opportunities because it has strong capital levels and it has the capacity to grow in it existing markets.
An aggressive acquirer in the late 1990s and early 2000s, Fifth Third has taken a break from deals of late as it focused on shedding problem assets. Now regarded as one of the industry's healthier companies, Fifth Third is eyeing deals that would "deepen density" in markets where it already has branches, Kabat said.
The company, which has nearly 1,400 branches in 12 states, has top-three deposit share in just under half its markets, and Kabat said its goal is to be among the top three banks in two-thirds of its markets within the next few years.
Mergers and acquisitions are "an avenue that will present important opportunities for us," Kabat said at the conference, which was hosted by Goldman Sachs Group Inc. He added that Fifth Third would also look to boost market share by opening new branches and hiring lenders away from competitors.