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Investing.com -- Fifth Third Bancorp (NASDAQ:FITB) shares fell 2.7% in after-hours trading on Tuesday after the bank disclosed it faces a potential loss of up to $200 million from alleged fraud involving a commercial borrower.
The Cincinnati-based lender said it discovered "alleged external fraudulent activity" connected to an asset-backed finance loan with an outstanding balance of approximately $200 million. The bank estimates it will take a non-cash impairment charge between $170 million and $200 million in the third quarter of 2025.
Fifth Third stated it concluded on September 5, 2025, that a material charge for impairment would result from the situation. The bank is currently working with law enforcement authorities regarding the matter and has engaged third-party advisors to determine the full extent of potential fraud-related losses.
The advisors’ findings will help the bank determine the exact impairment charge to be recognized in its third-quarter financial results. The company did not provide details about the nature of the alleged fraud or identify the commercial borrower involved.
This development comes as an unexpected challenge for the regional bank, which will need to absorb the significant financial impact in its upcoming quarterly performance.
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