(Reuters) -U.S. regional bank Fifth Third Bancorp reported a 14% jump in third-quarter profit on Friday on the back of robust fee income, but booked a $178 million loss related to the bankruptcy of auto dealer Tricolor.
Broad-based growth across Fifth Third's fee businesses lifted non-interest income to $781 million in the quarter, up 10% from a year earlier.
Wealth management and asset management fee revenue surged 11%, while mortgage banking fee revenue jumped 16%.
Shares of the bank rose 2.8% in
premarket trading. The stock had fallen 4.5% this year as of last close.
TRICOLOR LOSS
While the broader U.S. economy has remained resilient, fears about credit quality at some regional banks, including Zions Bancorporation and Western Alliance, triggered a fall in U.S. bank stocks on Thursday.
Fifth Third had disclosed last month it gave a $200 million asset-backed finance loan to auto dealer Tricolor, which filed for bankruptcy last month and moved to liquidate its business.
Net charge-offs, or debts that are unlikely to be recovered, totaled $339 million in the quarter, including a $178 million loss related to the impairment of the loan to Tricolor.
INTEREST INCOME GROWTH
Net interest income — the difference between what banks earn on loans and pay on deposits — rose 7% to $1.53 billion in the quarter, thanks to lower deposit costs and fixed-rate asset repricing.
Earlier this month, Fifth Third struck a $10.9 billion all-stock deal to buy regional lender Comerica, the biggest U.S. bank transaction this year that will create the nation's ninth-largest lender.
Fifth Third's profit jumped to $608 million, or 91 cents per share, in the three months ended September 30, compared with $532 million, or 78 cents per share, a year earlier.
(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Sahal Muhammed)
