Fifth Third Bancorp Reports Strong Q4 Performance Driven by Dealmaking Recovery
Fifth Third Bancorp announced a rise in its fourth-quarter profit, primarily attributed to increased dealmaking within the industry and higher wealth and asset management fees. The company's shares experienced a 1.5% increase in premarket trading, building on its 22.6% growth recorded in 2024.
Banks have witnessed a resurgence in dealmaking activity, spurred by enhanced economic confidence and increased political stability. Expectations of further rate cuts and pro-business policies under President Trump have fueled optimism for an ongoing revival in investment banking.
Fifth Third Bancorp recorded a 16% increase in its capital markets fees, which reached $123 million, and an 11% rise in its wealth and asset management revenue, amounting to $163 million. The lender's assets under management witnessed a significant 17% growth to reach $69 billion. These gains align with industry-wide trends, benefiting from the rebound in investment banking activity.
The bank's net interest income (NII), representing the difference between interest paid to depositors and earned on loans, grew by 1.5% to reach $1.44 billion. While Fifth Third estimates NII will remain stable in the first quarter compared to Q4, it anticipates a growth of approximately 5-6% for 2025.
Despite the positive performance, Fifth Third Bancorp's provision for credit losses increased to $179 million in the quarter, up from $55 million the previous year. Banks have been setting aside larger reserves to mitigate potential losses from bad loans, with rising interest rates exacerbating concerns over borrower defaults on mortgages.
For the three months ending December 31, the bank reported a net income of $582 million, translating to 85 cents per share. This marks a significant increase compared to the $492 million or 72 cents per share earned in the corresponding period of the previous year.