Fifth Third Bancorp (FITB) is streamlining its number of checking and savings products in an effort to win a larger share of customers' wallets.
The Cincinnati company currently offers more than 40 different checking and savings accounts, many of which are holdovers from acquisitions it has made over the years. Speaking at the UBS Global Financial Services Conference in New York Tuesday, President and Chief Executive Kevin Kabat said that Fifth Third will simplify its product menu by reducing the number of accounts to eight — five checking products and three savings products — during the second half of this year.
Kabat said that the move should eliminate customer confusion and "simplify relationship-building for the sales force," which he hopes will lead to more cross-selling of products and, ultimately, greater profits.
Kabat also said that the Fifth Third intends to resubmit to the Federal Reserve its previously rejected plan to hike its dividend.
Fifth Third petitioned to pay out a dividend that would be equal to the Fed's guidance of distributing 30% of earnings to investors in the form of dividends as part of the capital plan it submitted for the Fed's stress tests. Though Fifth Third passed the stress test, the Fed denied its request to buyback its stock and hike the dividend from the current 8 cents per share. Kabat said he is "confident" its proposal will be approved this time around because the company has roughly $1 billion of excess capital.
"Our earnings levels and capital levels are substantially above our targets," Kabat told investors and analysts at the conference.
The company plans to resubmit its capital plan in late May or early June and expects a response from the Fed in August, he said.