Fifth-Third Loss Narrows; PNC Reports a Profit
Published: Thursday, 21 Jan 2010 | 7:33 AM ET By: Reuters
Fifth Third Bancorp reported a much smaller fourth-quarter loss on Thursday after it recorded fewer writedowns on mortgages and other loans.
The Cincinnati-based bank said the loss for common shareholders had narrowed to $160 million, or 20 cents a share, from $2.2 billion, or $3.78 a share, a year earlier.
Analysts on average expected a loss of 31 cents a share, according to Thomson Reuters I/B/E/S.
Among the 10 largest U.S. banks, Fifth Third [FITB 11.31 --- UNCH (0) ] is exposed to some of the areas that have been hit hardest by the financial crisis, and its consumer lending business has suffered as unemployment has climbed.
Losses on loans in Florida and Michigan accounted for 53 percent of the bank's total charge-offs in the fourth quarter, according to the statement.
Total charge-offs — loans the bank does not expect to be repaid — fell to $708 million, from $1.6 billion a year earlier and $756 million in the third quarter.
Fifth Third increased its allowance for loan losses to $4 billion from $3.3 billion in the year-earlier quarter.
But Kabat said: "We do not expect further appreciable increases in our loan loss reserve levels to be necessary."
Although losses are easing, the bank said demand for new loans had fallen 10 percent from a year earlier. Fifth Third shares fell 8 cents to $11.31 on Wednesday. The stock had climbed 16 percent since the start of the year.
PNC Financial Services Group [PNC 58.79 --- UNCH (0) ] reported a fourth-quarter profit on Thursday as it benefited from declining loan losses and the year-earlier acquisition of National City.
Pittsburgh-based PNC posted a profit of $1.1 billion, or $2.17 a share, compared with a year-earlier loss of $246 million, or 77 cents a share.
Analysts on average expected a profit of 77 cents a share, according to Thomson Reuters I/B/E/S. In was not clear whether that figure was comparable to PNC's earnings.
The latest results included a $687 million after-tax gain related to BlackRock's acquisition of Barclays Global Investors.
The bank, among the strongest survivors of the financial crisis, bought Cleveland-based National City at the end of 2008, after the latter struggled with losses from subprime mortgages and other troubled assets.
PNC shares climbed 1.7 percent to close at $58.79 on Wednesday.
Copyright 2010 Reuters
