Fifth Third Sees Significant Lending Growth in First Quarter

Banking company Fifth Third Bancorp surprised analysts when it showed substantial growth in business lending during the first quarter of 2019, says Cincinnati Business Courier. It recorded earnings of 63 cents per share, which is higher than what analysts anticipated. This amounts to 11% growth as compared to its figures in the past year.

This turnout also surprised the bank, as it’s business lending grew more than what is expected, according to Fifth Third CEO Greg Carmichael. The bank’s average loan increased to 6% in the past quarter, amounting to $98 billion. It also recorded an increase in commercial and industrial loans, which rose by 10% to around $46 billion. Because of this, commercial and industrial lending shows the biggest growth in the bank’s portfolio.

In the past years, Fifth Third has been experiencing slow growth. However, figures from the first quarter of 2019 show a strong loan quality, especially as it went without huge loans that are not payable. According to Carmichael, this change from slow to faster growth began after the first 6 months of 2018.

Carmichael also talked about the bank’s overall results for the first quarter. According to him, the increase in earnings per share deviated from expert guidance but still corresponds with their own guidance.

Aside from business lending and earnings growth, Fifth Third also reports that it has acquired MB Financial as part of its expansion. This caused its asset to jump from $146 billion towards the end of 2018 to $168 billion by the end of this quarter.

However, experts predict that the bank’s net interest margin will suffer should a rate cut happen this year. As of today, their net interest margin is 3.28% and they have no plans for rate hikes this year.