Fifth Third's Profit Falls 4% on Lower Loan and Fee Income
GeorgiaNumerous banks are expected to say they trimmed expenses yet again when they report fourth-quarter results in the coming weeks. But that trend may ebb soon as many executives are forced to spend on technology and to expand their businesses.January 12
Mortgage lending, particularly for bigger banks, cooled some in October as home buying season ended. Meanwhile, loan pricing deteriorated again, showing that lenders are still cutting rates to land the best credits.December 8
Fifth Third Bancorp has lowered fees and eased terms on short-term, small-dollar loans as it awaits clearer guidance from regulators on the product's future.November 3
Fifth Third Bancorp in Cincinnati reported a drop in fourth-quarter profit on lower interest income from lending, and from decreased fees from mortgage banking.
Net income at the $139 billion-asset company fell 4% from a year earlier, to $362 million, or 43 cents per share.
The results included three nonrecurring items, which in the aggregate offset each other. Fifth Third recorded a $37 million after-tax positive valuation adjustment on its warrant in payments provider Vantiv, adding 4 cents per share to earnings. Fifth Third also recorded an after-tax provision expense of $15 million, or 2 cents per share, related to its transfer of mortgage loans classified as troubled debt restructurings to held-for-sale status; and an after-tax charge of $13 million, or 2 cents per share, related to the valuation of a Visa total return swap.
Net interest income fell 2% to $883 million. The net interest margin fell 25 basis points to 2.96%.
Fee income fell 7% to $918 million, including a 51% year-over-year decline in mortgage-banking income. Noninterest expense fell 7% to $918 million.