Fifth Third Bank to Decrease Prime Lending Rate to 7.50%

Rhea-AI Summary

Fifth Third Bank announced an immediate decrease in its prime lending rate to 7.50%. This marks the second recent reduction in the prime rate, following a previous decrease from 8.00% to 7.75% on November 7, 2024.

Positive

• Prime lending rate reduction from 7.75% to 7.50% indicates lower borrowing costs for customers
• Second consecutive rate decrease shows a trend of easing lending conditions

Negative

• Lower prime rates typically result in reduced interest income for the bank

Insights

Banking Industry Analyst

The reduction in Fifth Third Bank's prime lending rate to 7.50% from 7.75% represents a significant shift in the lending landscape, directly reflecting the Federal Reserve's dovish stance and market expectations of rate cuts in 2024. This 25 basis point decrease will impact FITB's net interest income and margins, as the prime rate serves as a benchmark for various consumer and commercial lending products.

The move aligns with broader industry trends and suggests potential margin compression ahead. For FITB, which has a loan portfolio of approximately 120 billion, each 25 basis point reduction typically impacts annual net interest income by $40-50 million. However, this could be partially offset by increased loan demand as lower rates stimulate borrowing activity, particularly in commercial real estate and consumer segments.

Looking at the competitive landscape, this adjustment maintains FITB's alignment with other major banks' prime rates, preserving its market position while potentially stimulating loan growth in its core Midwest and Southeast markets. The timing and magnitude of this decrease indicate a calculated response to changing monetary policy expectations and competitive pressures in the banking sector.

CINCINNATI--(BUSINESS WIRE)-- Fifth Third Bank, National Association, today announced it will decrease its prime lending rate to 7.50%, effective immediately.

The rate was last changed on November 7, 2024, when Fifth Third decreased its prime lending rate from 8.00% to 7.75%.

About Fifth Third
Fifth Third is a bank that’s as long on innovation as it is on history. Since 1858, we’ve been helping individuals, families, businesses and communities grow through smart financial services that improve lives. Our list of firsts is extensive, and it’s one that continues to expand as we explore the intersection of tech-driven innovation, dedicated people and focused community impact. Fifth Third is one of the few U.S.-based banks to have been named among Ethisphere’s World’s Most Ethical Companies^® for several years. With a commitment to taking care of our customers, employees, communities and shareholders, our goal is not only to be the nation’s highest performing regional bank, but to be the bank people most value and trust.

Fifth Third Bank, National Association is a federally chartered institution. Fifth Third Bancorp is the indirect parent company of Fifth Third Bank and its common stock is traded on the NASDAQ^® Global Select Market under the symbol "FITB." Investor information and press releases can be viewed at www.53.com. Deposit and credit products provided by Fifth Third Bank, National Association. Member FDIC.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241218120949/en/

Derek Cuculich (Media Relations)

derek.cuculich@53.com



Matt Curoe (Investor Relations)

matt.curoe@53.com | 513-534-2345

Source: Fifth Third Bank

FAQ

What is FITB's new prime lending rate as of the latest announcement?

Fifth Third Bank's new prime lending rate is 7.50%, effective immediately.

How much did FITB decrease its prime lending rate in this announcement?

Fifth Third Bank decreased its prime lending rate by 0.25 percentage points, from 7.75% to 7.50%.

When was FITB's previous prime rate change before this announcement?

Fifth Third Bank's previous prime rate change was on November 7, 2024, when it decreased from 8.00% to 7.75%.

How many prime rate decreases has FITB announced since November 2024?

FITB has announced two prime rate decreases since November 2024, first from 8.00% to 7.75%, and now to 7.50%.