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

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.”