However, loan “demand is not as heavy as we would like,” Kabat told reporters. The bank’s high capital levels mean “we can make as many loans as we want and we’re trying to do just that.”
But the bank has to find willing and qualified borrowers, and won’t go back to the lower underwriting standards prevalent in the early 2000s, he said.
Kabat highlighted last year’s performance for investors, saying 2012 was the most profitable year for Fifth Third since 2005.
Overall the region’s largest bank by deposits held, Fifth Third saw in 2012 record levels of mortgage banking and corporate banking revenue. Capital levels grew even though the bank has returned an increasing amount of capital to shareholders, amounting to about $1 billion, or a 60 percent payout of earnings, in 2012.
“We feel good about the strength of our competitive position,” Kabat said.
Meanwhile, banks still deal with overhang from the slow-growing economy and increased regulation.
Fifth Third stockholder Carl Boeckman of Cincinnati raised concerns that the bank is undervalued due to regulation risk.
“Fifth Third’s share price is nowhere close to where it should be,” Boeckman said.
The company’s stock is trading above $16 per share, compared to a closing price April 16, 2008, of $20.10.
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