Fifth Third Bancorp is the latest bank to reduce its involvement in indirect auto lending, saying that it plans to cut its originations by about 15%.
Executives at the Cincinnati-based bank said Thursday that they are leaning into business models built on deepening customer relationships. In indirect auto lending, car dealers stand between customers and lenders, which can make it difficult for banks to sell more products to customers.
Fifth Third said that the pullback in indirect auto lending is concentrated in certain states west of the Mississippi River.
The $207 billion-asset bank is "trimming outsized lines" while continuing to invest in fintech platforms that offer a range of financing products and client services, according to Fifth Third CEO Tim Spence.
Last month, Citizens Financial Group said it would
On Wednesday, Ally Financial said that as some lenders are pulling back in auto lending,
At Fifth Third, auto loans shrunk during the second quarter, but total loans rose by 3% from the same period last year, thanks largely to growth at Dividend Finance, the bank's solar energy and home improvement platform.
Dividend, which Fifth Third
The bank's other recent fintech acquisition, Provide, also continues to give Fifth Third's balance sheet a boost.
Provide, which finances and provides advisory services to small businesses in the health care sector, is maintaining a "good origination pace" and is also growing "full-product relationships," Spence said in an interview following Fifth Third's earnings call.
More than 90% of customers that have obtained financing through Provide also have deposit accounts at Fifth Third, with the average account holding over $100,000, according to Spence.
