Another US Regional Bank In Need Of Capital

June 2008 | Top Stories

Fifth Third Bancorp, the large US regional bank hit hard by mounting credit losses and an ill-timed acquisition, announced on June 18 that it plans to raise at least US$2bn in capital, and slash its dividend by 66%. Following the news, the banks shares fell by 18.6% to close at US$10.36 on June 18, their lowest level since 1995. CFW had previously highlighted that, though banking giants like Lehman Brothers and Merrill Lynch were the ones making the headlines, it would be the small and medium sized US banks, such as Keycorp, that could be severely affected. This was borne out earlier in the month when Keycorp announced its plans to raise US$1.5bn in new capital and slash its dividend by 50% to offset expected losses in Q208.

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