Fifth Third Bancorp Reports Better-Than-Expected Q3 Earnings, Anticipates Loan Growth Despite Interest Income Weakness

Analysts adjust price targets after strong credit performance and fee growth; banking firm predicted to see NII decline by 1-2% in Q4 due to increased funding costs.

• Fifth Third Bancorp reported Q3 sales of $2.16 billion, surpassing the consensus of $2.15 billion, and an adjusted EPS of 92 cents, beating the anticipated 82 cents.
• Despite reporting a year-on-year interest income increase of 44% to $2.54 Billion, the company's Net Interest Income (NII) declined by 4%, causing shares to fall by 5.5%.
• Favorable credit performance and deposit growth have position Fifth Third Bancorp to expand lending in growth markets, with a return to loan growth expected for the following year.
• Amid economic uncertainty and volatility, the bank's credit quality remained robust, reporting a 7% decline in early-stage loan delinquencies from the previous quarter, and a 6% drop from the corresponding period of the previous year.
• Fears over increased funding costs have raised concerns over further weakening in NII, which is expected to decline by 1-2% in Q4, however, non-interest income rose, helping Fifth Third to beat earnings estimates.

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