Fifth Third, Other Ohio-Based Banks Hurt by the Housing Slump
Cincinnati–Fifth Third Bancorp.–a large regional bank based in Cincinnati–said Wednesday that it would cut its dividend by 66 percent and raise at least $2 billion in capital to make up for growing credit losses, the New York Times reports.With $111 billion in assets and 1,314 branches in 12 states, Fifth Third is the second-largest bank…
Cincinnati–Fifth Third Bancorp.–a large regional bank based in Cincinnati–said Wednesday that it would cut its dividend by 66 percent and raise at least $2 billion in capital to make up for growing credit losses, the New York Times reports.With $111 billion in assets and 1,314 branches in 12 states, Fifth Third is the second-largest bank headquartered in Ohio, which has been one of the states most affected by the U.S. housing slump.Other Ohio-based banks–including National City Corporation and KeyCorp, the state’s largest and third-largest lenders–also had to raise capital and reduce dividends this year.Fifth Third plans to issue 1 billion in convertible preferred shares and sell non-core businesses in the next few quarters to raise at least $1 billion.”We expect these actions to enable us to weather further depreciation in home prices as well as a significant weakening in economic activity,” the chief executive Kevin T. Kabat said in a statement. “Our bottom-line results won’t meet our expectations. We are not satisfied.”
