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Investing.com - Fifth Third Bancorp (NASDAQ:FITB), currently trading at $43.05 with a GOOD financial health score according to InvestingPro, received a reiterated Neutral rating and $47.00 price target from Citi on Thursday.
The bank reported earnings with a 2-cent core PPNR (pre-provision net revenue) beat, driven by strong net interest income as loan yields increased and deposit beta remained strong, which offset slightly softer fees. The bank maintains a solid P/E ratio of 13.6x and has demonstrated remarkable dividend consistency, maintaining payments for 51 consecutive years.
Fifth Third management raised its full-year net interest income growth forecast range by 50 basis points to 5.5-6.5%, while lowering fee growth expectations to 1-2% from the previous 1-3% range, largely offset by improved expense outlook of 2-2.5% growth versus the earlier 2-3% projection.
Credit quality metrics showed improvement with non-performing assets decreasing approximately 11% sequentially after three quarters of increases, while net charge-offs decreased 1 basis point to 45 basis points and the loan loss reserve ratio increased 2 basis points to 1.97%.
The bank’s CET1 capital ratio increased approximately 13 basis points to 10.6%, though no share buybacks occurred during the quarter, with management previously indicating buybacks would likely resume in the second half of 2025.
In other recent news, Fifth Third Bancorp reported second-quarter earnings that exceeded analyst expectations, driven by robust revenue growth from ongoing loan expansion and improvements in net interest margins. The Cincinnati-based bank posted adjusted earnings per share of $0.88, surpassing analyst estimates of $0.87, while revenue reached $2.25 billion, exceeding the consensus forecast of $2.22 billion. Revenue increased by 8% year-over-year, marking the highest growth rate in over two years. Net interest income rose 8% year-over-year to $1.5 billion as the bank’s net interest margin expanded for the sixth consecutive quarter to 3.12%. Total (EPA:TTEF) loans grew by 5% compared to the second quarter of the previous year, achieving the highest annual growth rate in over two years. Fifth Third Bancorp maintained solid credit quality, with its net charge-off ratio declining to 0.45% and nonperforming assets decreasing 11% sequentially. The company’s CET1 capital ratio increased to 10.56%, reflecting strong profitability. Additionally, the bank’s efficiency ratio improved to 56.2%, with the adjusted efficiency ratio showing a 130 basis point improvement year-over-year.
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