Credit where due - Fifth Third's (FITB)
integration of MB Financial appears to be going well, and the bank is
producing good fee-based income growth, which is an important
consideration in an environment where spread revenue growth
opportunities are limited. Unfortunately, the company is not really
distinguishing itself on loan growth nor pre-provision profit growth,
and those were concerns that had me neutral on the stock back in the summer (the shares are down slightly since then, underperforming the sector by around 5%).
Fifth
Third is another of those situations where the valuation seems too low
now, but I wonder and worry about the likelihood of weak loan growth and
pre-provision profit growth limiting the gains. Management's guidance
seems relatively encouraging on that score, but I'm worried about
reports of ongoing defections from the bank and what they may say about
long-term loan growth in the now-key Chicago market.
Read more here:
Fifth Third Still Lackluster In A Few Important Respects
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