NEW YORK (Standard&Poor's) July 22, 2008--Standard&Poor's Ratings Services said today that its rating on Fifth Third Bancorp (A+/Negative/A-1) remains unchanged with the company's second-quarter announcement of a loss caused by a $229 million after-tax charge related to leveraged lease litigation. This additional reserve represents management's expectation of the maximum downside risk if the firm's case against the IRS has an unfavorable outcome. Given recent court rulings on similar cases, we believe it was prudent for Fifth Third to recognize the potential charge. Despite ongoing credit difficulties, Fifth Third's performance metrics are strengthening. Loan growth, net interest margin (without the leveraged lease reserve), and noninterest income are all improving and have supported significant incremental reserve building. Still,
