FIFTH THIRD BANCORP
Profit, Revenue Rise
Fifth Third Bancorp said its profit and revenue increased as
loans and deposits grew.
Earnings beat Wall Street estimates as the company said results
were strong despite a "tepid economic environment."
The bank posted earnings of $516 million, compared with $381
million a year earlier. On a per-share basis, earnings rose to 65
cents from 45 cents. Revenue at the Cincinnati-based bank increased
8.3% to $1.75 billion. Analysts had expected 40 cents a share in
earnings and $1.52 billion in revenue, according to Thomson
Reuters.
Expenses grew by 3%, driven by increased salary and employee
benefits that were partially offset by cheaper occupancy costs and
equipment expenses. Total business loans grew by 1.5% as consumer
loans fell 1.9% due to increased residential mortgage and
commercial construction loans. Net interest margin, an important
measure of lending profitability, fell to 2.88% from 2.89% last
year.
--Austen Hufford
TRAVELERS
Premium Volume Increases to Record
Travelers Cos. said third-quarter operating earnings fell 24%,
as premium volume hit a record but the company was up against an
unusually strong year-earlier quarter.
Operating earnings of $701 million, or $2.40 a share, were down
from $918 million, or $2.93 a share, a year earlier. Operating
earnings are the industry benchmark because they exclude realized
capital gains and losses in investment portfolios. Analysts
expected operating profit of $2.38. Overall, Travelers reported a
profit of $716 million, or $2.45 a share, down from $928 million,
or $2.97 a share, a year earlier.
New York-based Travelers is one of the first big
property-casualty insurers to release third-quarter earnings, and
its results are watched closely as a bellwether for others that
follow. Travelers, part of the Dow Jones Industrial Average, is a
leading seller of insurance to U.S. businesses, and sells car and
home insurance to individuals and families.
Net premiums written increased 3.2% to $6.39 billion. Analysts
polled by Thomson Reuters expected net premiums written of $6.37
billion. The Travelers auto-insurance business delivered some of
the company's strongest premium growth, while the
business-insurance unit posted flat net written premiums.
Travelers cited hail storms in the western U.S. and flooding in
the southeast as a factor in results. But it and other
private-sector insurers largely were spared of major catastrophe
damage when Hurricane Hermine landed in Florida but quickly
weakened. The storm left extensive power outages over the Labor Day
weekend on the East Coast but relatively modest claims volume.
Analysts are expected to focus more on any comments during
Travelers' earnings call on Thursday regarding Hurricane Matthew, a
major storm that threatened to hit Florida in early October but
stayed offshore to then make landfall in South Carolina. Its damage
will show up in insurers' fourth-quarter earnings. Matthew caused
flooding and widespread power outages as it moved up the U.S.
Atlantic Coast and took a toll on North Carolina's agricultural
sector.
In the year-earlier period, catastrophe claims were at an
abnormally low level, contributing to the tough comparison
year-over-year.
More broadly, the insurance industry continues to face
challenges from low interest rates, which depress income earned
from investing customers' premium dollars until needed to pay
claims. Travelers said its investment income fell 5.2%, as its
investment team put maturing bonds and new money to work at lower
yields.
For the latest quarter, Travelers reported that its catastrophe
losses, net of reinsurance, reached $89 million, compared with $85
million a year earlier.
--Tess Stynes, Leslie Scism
CONSUMER TRENDS
Among Unbanked, Prepaid Cards Gain
More households that don't have bank accounts are using prepaid
cards for basic financial services, such as making purchases,
receiving deposits and saving for the future, a government survey
found.
Among U.S. households that have no access to the regular banking
system, 27% reported using prepaid cards in the 12 months before
June 2015, when the survey was taken, up from 22% in 2013. The
Federal Deposit Insurance Corp. survey, released Thursday, found
that 9.8% of all households reported using prepaid cards, up from
7.9% in 2013.
The survey, done in partnership with the U.S. Census Bureau,
collected responses from more than 36,000 households.
--Yuka Hayashi
(END) Dow Jones Newswires
October 21, 2016 02:47 ET (06:47 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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