FifthThird Posts Loss on Rising Credit Costs
Fifth Third Bancorp, a large Midwest bank, on Tuesday posted a second-quarter loss due to rising charges related to the tax treatment of leveraged leases and higher credit costs.
The Cincinnati-based company reported a net loss of $202 million, or 37 cents per share, from a profit of $376 million, or 69 cents per share, a year earlier.
Results included a charge of 42 cents per share related to the tax treatment of a certain type of lease.
Excluding that charge, Fifth Third earned 5 cents a share, beating analysts' forecast that it would break even, according to Reuters Estimates.
"Absent unexpected events, we anticipate returning to profitability in the third quarter," Chief Executive Kevin Kabat said in a statement.
The bank's Tier 1 ratio was higher at 8.51 percent after it issued $1.1 billion of convertible preferred securities last month and cut its dividend.
Fifth Third shares closed Monday at $13.39 on the Nasdaq. The shares have fallen 46 percent this year, compared with a 29 percent decline in the KBW Bank Index.