Investing
Fifth Third expects further interest income weakness after quarterly profit falls
© Reuters. FILE PHOTO: A branch location of Fifth Third Bank is shown in Boca Raton, Florida, January 21, 2010. REUTERS/Joe Skipper/File photo
(Reuters) – Fifth Third Bancorp (NASDAQ:) said on Thursday it expects interest income (NII) to decline again in the current quarter after posting a 1.3% fall in third-quarter profit.
Funding costs of lenders have come into focus in the higher-for-longer interest rate environment where assets such as money market funds are turning better returns for customers than banks, who are now raising rates to hold clients.
The bank’s net interest margin in the quarter contracted to 2.98% from 3.22% a year earlier.
Cincinnati, Ohio-based Fifth Third sees net interest income – the difference between the interest banks earn on loans and pay out on deposits – down roughly between 1% and 2% in the fourth quarter.
Fifth Third’s third-quarter NII fell 4% from a year earlier to $1.44 billion.
In a bright spot, a rise in non-interest income helped Fifth Third earn 92 cents per share, excluding one-time costs in the three months ended Sept. 30, beating analysts estimates of 82 cents per share, per LSEG data.
Shares of the lender were up 1.6% in premarket trading.
“We generated strong fee growth compared to the year-ago quarter while maintaining expense discipline,” said CEO Tim Spence.
Meanwhile, bank deposits have also stabilized in recent months following a sector-wide crisis of confidence in March, which saw customers divert funds away from smaller banks and toward larger “too-big-to-fail” rivals.
Average deposits at Fifth Third were up 4% at $165.64 billion in the third quarter compared with a year earlier.
(This story has been refiled to remove an outdated logo of the bank)
Read the full article here
-
Side Hustles5 days ago
Mark Zuckerberg Is Now Second Richest Person in the World
-
Investing5 days ago
Nvidia CEO Jensen Huang: Demand For Blackwell AI Is Insane
-
Side Hustles6 days ago
With AI Magicx, It’s Like Getting an Entire Creative Team in One Money-Saving AI Tool
-
Side Hustles6 days ago
How to Be Unapologetically You and Why It Matters
-
Side Hustles5 days ago
Meta Previews Movie Gen, AI Tools That Turn Dreams to Videos
-
Investing3 days ago
Hurricane Helene Hits Spruce Pine Mine, Quartz Used for Tech
-
Passive Income6 days ago
How AI-Driven Personalization Is Transforming the Retail Industry
-
Investing5 days ago
BCA says investors should fade the real estate rally By Investing.com