Fifth Third Bancorp Q2 EPS Tops Estimate, Interest Income Jumps 62% Y/Y

Fifth Third Bancorp FITB reported second-quarter (Q2) 2023 sales of $2.19 billion, which was in line with the consensus.

The Cincinnati-based company reported an interest income increase of 62% Y/Y to $2.38 billion, with a net interest income (NII) of $1.46 billion (+9% Y/Y).

Fifth Third attributed the NII growth to the net benefit of higher market rates and an increase in C&I loan balances and investment portfolio balances.

Also, the net interest margin rose 18 basis points to 3.10%.

The provision for credit losses in the quarter stood at $177 million, down 1% Y/Y.

The CET1 capital ratio was 9.53%, compared with 8.95% in the year-ago period. 

Compared to the year-ago quarter, total average deposits decreased 1% Y/Y to $160.86 billion, reflecting lower demand deposit account balances. 

Average loans and leases stood at $123.99 billion, increasing 3% Y/Y.

Adjusted EPS of $0.87 topped the Street view of $0.83, including a negative impact of $0.05 from the Visa total return swap valuation.

"We continue to prudently invest in this environment, adding net new households in consumer and new quality middle market relationships in commercial," Fifth Third CEO Tim Spence said.

Fifth Third also bought Rize Money to "accelerate" its embedded payments capabilities under the Newline brand, Spence said. "We also de-emphasized certain areas of the bank in order to optimize capital and returns going forward, including lowering production targets in indirect secured consumer lending," he added.

Price Action: FITB shares are trading lower by 0.48% at $27.89 on the last check Thursday.

Image: Fifth Third