Fifth Third Quarter Results to Fall Short of Estimates
Fifth Third Bancorp forecasted fourth-quarter earnings below analysts' estimates, as it sets aside more money to cover bad home equity and construction loans.
The large U.S. Midwest bank said it expects fourth-quarter earnings of about 24 cents to 27 cents a share. That is below the average analyst estimate of 65 cents a share, according to Reuters Estimates.
Cincinnati-based Fifth Third said it plans to set aside $275 million in the fourth quarter to cover loan losses, more than double its provision in the same quarter last year.
The bank faces higher losses on home equity loans, and commercial construction and mortgage loans in Eastern Michigan and Florida. That includes non-performing loans acquired when it bought R-G Crown Bank in November.
Fifth Third set aside $107 million for loan and lease losses in the fourth quarter of 2006, and $139 million in the third quarter of 2007.