Fifth Third Bancorp’s quarterly profit falls on lower interest income

April 19 (Reuters) – Fifth Third Bancorp (FITB.O), opens new tab posted a 10% drop in first-quarter profit on Friday as higher deposit costs weighed on the lender’s interest income.

Regional banks have steadily increased the interest rates they offer on deposit accounts to retain customers looking for greater returns by parking their money in higher-yielding alternatives.

Cincinnati, Ohio-based Fifth Third’s net interest income on a reported basis – the difference between what a bank earns on loans and pays on deposits – fell nearly 8.8% to $1.38 billion in the quarter.

Net interest margin contracted to 2.86% in the first quarter versus 3.29% in the year-ago period.

Fifth Third continues to expect its NII in 2024 to decline between 2% and 4%. Analysts on average expect it to fall 3.4%, according to LSEG data.

Regional peers U.S. Bancorp (USB.N), opens new tab and KeyCorp (KEY.N), opens new tab reported their earnings on Thursday and posted similar NII declines.

Provision for credit losses fell to $94 million in the quarter from $164 million last year.

Source: REUTER