53.com
Fifth Third Bancorp
Fifth Third has provided a superior customer service since the very beginning of its formation, and followed disciplined banking norms. Today, Fifth Third Bank is known to be one of the strongest top-performing banks in the nation, and its sense of providing quality service still continues, as it expands its operations, setting standards for the banking industries.
History
The history of Fifth Third has been quite rich in its growth and innovation. The origin of the bank starts from Ohio Valley, first being established in Cincinnati in 1858. The bank was purchased by Third National Bank in 1871, and on June 1, 1908, both banks merged, and came to be known as The Fifth Third National Bank of Cincinnati. The merger took place in the days of prohibitions, and it is believed that the name that started as 'Fifth Third' was better than 'Third Fifth', as otherwise it could have been construed as a reference to three "fifths" of alcohol. The name of the bank went through several changes during this period, and assumed the name of Fifth Third Bank on March 24, 1969.
Profile
Fifth Third is listed on NASDAQ, and has the symbol FITB. It is an US regional banking corporation, having it’s headquarter in Cincinnati, Ohio. By the end of March 31, 2007, Fifth Third Bank had 18 affiliates, 1,161 full service banking centres, and 2,104 Jeanie ATMs. The bank has five main business lines, which are as follows:
- Branch Banking
A range of deposit, loan, and lease product services are given to individuals and small business enterprises, through the bank's 1,150 branches. In this service, the bank offers depository and loan products, such as accounts with checking and savings, home equity loans, credit cards, automobile loans, and other types of personal loans. The bank also offers products especially designed to meet the specific requirements of small business. This includes cash management service.
- Commercial Banking
In this line of business, the bank offers several financial services to large and middle sized organizations, governments, and professional customers. The services include, financing for the public, financing real estates, cash management, international trade financing and foreign exchange, foreign exchange and international trade finance, asset based lending, derivatives and capital markets services. In addition to its conventional lending and depository services, the bank offers cash management services, derivatives and capital markets services, asset-based lending, real estate finance, public finance, and commercial leasing and syndicated financing.
- Consumer Lending
In this line of business the bank offers its mortgage and home loan services, having other indirect lending activities. In this line of business, the mortgage and the home lending activities include, the origination, mortgage retention and servicing, and home equity loan or lines of credit facilities. The bank also provide, sales and securitizations of the equity loans, including a pool of loans, or lines of credits, and all others connected with hedging activities. The bank offers indirect lending, such as, "loans to its customers through mortgage brokers, auto dealers and federal and private student education loans."
- Investment Advisors
The bank provides a range of investment alternative advises to individuals, companies, and non-profit organizations. The primary services of the bank include investments, trust, asset management, retirement plans, and custody. The indirectly wholly owned subsidiary of the bank, Fifth Third Securities, Inc., provides full service retail brokerage services to its individual clients. It also provides broker dealer services to the institutional markets. The other indirect wholly owned subsidiary, Fifth Third Asset Management, Inc., offers asset management services, and also advises on the bank's family of mutual funds.
Health Service Account (HSA)
Amongst the many innovative products that the bank services, one of them are the Health Service account (HSA). The bank provides a custodial account or trust, which is created for the entire benefit of the account holder. The account is tax free, and the account holder is covered for "a high-deductible health plan (HDHP)", which could be used towards stipulated medical service expenses. The account provides help towards deductibles and out of the pocket expenses, which satisfies specific federal requirements related to the expenses incurred. To become qualified for HSA, your deductible for your own-self coverage must be a minimum of $1,000, or $2,000 for the family coverage. The amounts have been increased to $1,050 and $2,100 respectively for 2006, with a further increase of $1,100 and $2,200 for the year 2007. There has been no increase for 2008.
There are certain conditions for HSA. The total annual expenses for 2005, which comprises of out-of-the-pocket expenses and deductibles, cannot exceed $5,100 for self-only coverage, and $ 10,200 for the family coverage. These two amounts have been increased to $5,250 and $10,500 for the year 2006, and, as for 2007, the expenses cannot exceed $5,500 for individuals and $11,000 for families. The expenses would include out-of-the-pocket expenses and deductibles, but not the premium amounts. For 2008, the amounts have been raised to $5,600 and $11,200 respectively.
While the bank has been providing financial services for over 150 years, it has been continually striving to develop new products for its customers. The bank has a healthcare team, specialized in dealing with banking opportunities of the industry. This team comprises of “Relationship Managers, Product Managers, Capital Markets Professionals and Treasury Management Officers.” Fifth Third meets the unique challenges set by the industries, by supporting events organized by the local and national industries, actively participating with its customers to prepare specific solutions for them.
In order to accomplish its health concerned products, the healthcare division of Fifth Third has affiliations with several organizations, which include:
- Medical Group Management Association (MGMA).
- Healthcare Financial Management Association (HFMA).
- Medical Banking Project.
- America’s Health Insurance Plans (AHIP).
- Association for Financial Professionals (AFP).
- Health Improvement Collaborative of Greater Cincinnati.
Security Breaches
An article was published in the New York Times, in January 2007, titled "Data Breach Could Affect Millions". It mentioned regarding breach of data security of TJX account, where the sponsoring bank has been identified as Fifth Third, who handles the TJX accounts. The bank is responsible for maintaining the norms that need to be met by industry’s data security standards. It was found that, potentially 47.5 million credit card details were exposed to unauthorized persons, and the TJX computer systems were first breached in July, 2005. The hacker or hackers accessed the information, entering into the customer transaction details dating to January, 2003. This was not found out by TJX till recently. TJX believes that the intruder had the "access to the decryption tool for the encryption software utilized by TJX.” Fifth Third may be required to cover a part of the damages done.
This is one of the largest hacking incidents that have been reported in North America. It is estimated that by this breach, one to two million Canadian cards, issued by the banks and other institutions, could have been affected. Twenty million cards issued by Visa could have been vulnerable to this breach.
Recent Performance
Wall Street held a high expectation for the financial performance of Fifth Third, which has been growing quite fast. The performance of the bank has been quite disappointing, over the last few years, failing to meet the expectations of Wall Street. The growth of the bank has slowed down considerably, with returns on asset and equity falling close to the average banks in the US. Returns on assets fell to 1.05% in the year 2005, while the return on equity fell by 16.60%. As for the year 2006, the picture is not bright. The net income of $1.19 billion in the year 2006, recorded a fall by 23% over the net income in 2005, which was $1.55 billion and $2.77 per diluted share. Compared to the last ten years, the performance is at its low, and judging by return on equity, 2006 has been the worst year so far.
Languages
English
Address
- 38 Fountain Square Plz
- Cincinnati OH 45263 US
Additional Information
Related Domains
External Links
- Stock: FITB
- Alexa: 53.com
- WHOIS for 53.com
