Debit card interchange-rate reductions that took effect Oct. 1 triggered a big reduction in Fifth Third Bancorp’s first-quarter card and processing revenue compared with the same period last year, the company reported April 19.
The Cincinnati-based bank reported $59 million in card and processing revenue, down 26% from $80 million. Of that decline, the new, essentially halved debit card interchange rates affected Fifth Third as a card issuer, accounting for a $30 million reduction in revenue, the bank estimated.
The revenue decline stemming from the effects of the Durbin amendment was only partially offset increased transaction volume for Fifth Third to process, the bank reported.
In a signal that bad consumer debt continues to ease, credit card losses charged off during the first quarter totaled $20 million, down 35% from the $31 million a year earlier. Average credit card loans increased 2.7%, to $1.9 billion from $1.85 billion.
Overall, Fifth Third reported first-quarter net income of $430 million, up 62% from $265 million.
Fifth Third Processing Solutions LLC became Vantiv Inc. in June 2011 (
Fifth Third Bank owns 84 million shares representing a 39% interest in Vantiv. Based upon Vantiv’s closing price of $19.63 on March 30, Fifth Third reported its interest in Vantiv was valued at $1.6 billion.
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