Jan 22 (Reuters) - Fifth Third Bancorp said on Tuesday it expects net interest income to rise about 3 percent this year, even if there are no interest rate hikes, sending the regional lender’s shares up 2.1 percent.
Chief Financial Officer Tayfun Tuzun, on a conference call with analysts, also said he expects average total loans to grow between 3 percent and 3.5 percent year-over-year.
The comments followed the bank’s better-than-expected fourth-quarter profit, as it earned more from interest-bearing assets and saw its loan book rise.
Net interest income of the lender, which is concentrated in the south-eastern and central region of the United States, rose 13 percent as average loans grew 3 percent.
Regional banks, including PNC Financial and U.S. Bancorp, have seen their net interest incomes increase after four interest rate hikes by the Federal Reserve last year.
But concerns of slowing global growth and financial market volatility has kept the Fed on the sidelines, saying that further rate hikes will need a wait and watch approach.
Fifth Third’s total average deposits were also up 4.6 percent during the quarter.
“Overall, a mostly solid quarter..,” Evercore ISI analysts said in a note, adding “expenses were particularly well-contained.”
Fifth Third, which operates more than 1,200 branches, said on the call that it would shut 10 underperforming branches, and focus on expanding in the Denver, Dallas and Houston markets. (Reporting by Mary Ann Alapatt in Bengaluru; Editing by Shailesh Kuber)