Bankruptcy

Fifth Third Bancorp Needs to Raise Capital After Dividend and Profit Forecast Cut

By J. Michael McBride

Bloomberg reports that Fifth Third Bancorp, Ohio’s second largest bank, “stock fell 19 percent, after slashing its dividend and forecasting much lower profit.” This is reportedly the largest decrease in at least 23 years.

“Fifth Third joins the list of banks and securities firms that have raised more than $300 billion to shore up their balance sheets after losses tied to mortgage and debt markets,” reported Bloomberg. The company stated that it will sell subsidiaries and preferred convertible stock in an effort to raise $2 billion.

A Goldman Sachs analyst said, “U.S. banks may need an additional $65 billion as losses and writedowns extend into 2009's first quarter.” Another analyst claimed “Fifth Third is particularly vulnerable because it operates in states where borrowers are having the hardest time keeping up with payments.”

Fifth Third is the last of Ohio's three largest banks to raise capital.

Here is a link to this article:
http://www.bloomberg.com/apps/news?pid=20601087&sid=a2gYPg3wFdr0&refer=home

Yameena

Full post as published by Texas Lawyer Blog on June 18, 2008 (boomark / email).