Boston, MA 10/18/2013 (wallstreetpr) – The 19% Q3.13 jump in profits at Fifth Third Bancorp (NASDAQ:FITB) is attributed, in part, to the sale of its shares in former subsidiary Vantiv. The Cincinnati-based banking company announced net income of $421 million, representing $0.47 per share on Thursday, October 17. These earnings capture the three months trading period ending September 30, 2013.
In a year earlier, the regional banking company realized $354 in net income, or $0.38 per share for a comparable quarter. Out of the reported $421 million in net income, Vantiv transaction accounts for around $85 million, or just about $0.06 per share. This is in pretax benefit.
These new gains exceed analyst expectations on the stock. In the run up to the earnings release, analyst had betted $0.42 per share earnings on the company’s stock. In this case, they got it wrong, albeit this time around, by a margin of $0.05 per share. But it has to be recalled that analysts’ estimates do not factor in one-time charges and gains which are typically of most businesses, and more so banks.
The financial institution reported that its interest income from loans and deposits dipped by 1% to earn it $898 million in net interest. On the other hand earnings from fees and related non-interest income climbed 7% to earn the bank $721 million. Also, the financial institution realized 109 million in net charge-off based on bad loans, which indicated a drop of about 30%.
For the first time in a duration spanning six years, the bank has seen its credit trend improving which net charge-off falling below 50 basis points. The company CEO Kevin Kabat told analysts and investors at the conference call.
The company did expect reduced mortgage revenue and it did realize just that in the income results.
So far, FITB has announced trimming its budget for bad loan recovery to $51 million following market improvement.
The bank which operates around 1,300 branches has its market value at $16.15 billion as of October 17.
