High profit margin A long-standing, intensely sales-driven culture Immature market shares in most retail banking markets allow for quick response/flexibility to intensifying competitive pressures, and offer upside potential Diminished loan-loss reserve coverage ratio of total loans and increased balance sheet leverage Slowing low-cost core deposit growth Negative operating leverage The ratings on Fifth Third Bancorp (Fifth Third) reflect the company's strong profitability, healthy credit quality, and adequate funding and liquidity profiles. After a solid track record of superior financial results for more than a decade, Fifth Third's financial performance has been slipping recently. Moreover, Fifth Third has increased balance-sheet leverage, and the company's once wide capital advantage versus peers has disappeared, but capital levels remain appropriate for its rating category.
