Moody's downgrades Fifth Third deposits.

Moody's Investors Service Inc. downgraded the long-term deposits of Fifth Third Bank, Cincinnati, to Aa2 from Aa1.

The bank had been under review since April for a possible downgrade, when Moody's cited the bid by its parent, Fifth Third Bancorp, to acquire rival Star Banc Corp. The company abandoned that effort on June 30.

"The long-term predictability of Fifth Third's performance could lessen because of increasing bank consolidation in the Midwest and growing competition in the electronic transfer business," Moody's said Friday.

Fifth Third's Midwest Payment Systems subsidiary is expected to be challenged by Electronic Payment Services Inc., a joint venture announced last week by Banc One Corp., CoreStates Financial Corp., PNC Financial Corp., and Society Corp.

For reprint and licensing requests for this article, click here.
MORE FROM AMERICAN BANKER