On Sept. 3, 2008, Standard&Poor's Ratings Services placed its 'A+' counterparty credit rating on Fifth Third Bancorp on CreditWatch Negative. The short-term 'A-1' rating is affirmed. The CreditWatch is a result of a broader review of U.S. regional bank institutions. Our review to resolve the CreditWatch will focus on the outlook for Fifth Third's credit performance and profitability, particularly in the context of the deterioration in Florida's residential construction and housing market. Despite Fifth Third's successful, albeit expensive, capital raising in the first two quarters of 2008, the company's loan portfolio deterioration continues to weigh heavily on an otherwise solid core earnings platform. The company currently has a strong capital position with additional levers available to preserve it.
