(Reuters) – Fifth Third Bancorp reported a near 13% rise in first-quarter profit on Thursday as the lender’s income was bolstered by a slew of interest rate hikes by the U.S. Federal Reserve.
Banks have been some of the most prominent beneficiaries of the Fed’s aggressive monetary policy tightening aimed at bringing down inflation after the central bank kept rates at near-zero for years during the pandemic.
Fifth Third’s net interest income rose 27% to $1.52 billion in the first quarter, compared with $1.20 billion a year earlier.
The results come at a time when regional lenders in the U.S. are facing the twin task of assuring customers their deposits are safe and investors that there is no liquidity crunch after the collapse of two rivals in March battered the sector.
Fifth Third’s total average deposits in the reported quarter were down marginally at $160.65 billion, compared with $161.06 billion at the end of the fourth quarter.
The recent banking crisis led to worried customers pulling capital from smaller lenders in favor of bigger counterparts that are considered “too-big-to-fail”.
Fifth Third posted a net income available to common shareholders of $535 million, or 78 cents per share, in the first quarter, compared with $474 million, or 68 cents per share, a year earlier.
The company’s shares, which have lost 14.6% so far this year, were flat in premarket trading.
(Reporting by Manya Saini in Bengaluru; Editing by Shounak Dasgupta)
