Fifth Third sees 4Q19 ROTCE at upper end of 12%-14%, efficiency ratio below 60%
In slides being presented at its Investor Day, Fifth Third provided annualized 4Q19 targets, including ROTCE at the upper end of 12%-14%, ROA in the mid to upper end of 1.1%-1.3% and efficiency ratio less than 60%. Fifth Third is assuming rate hikes in December 2017, September 2018 and September 2019, and says assuming an otherwise stable economic environment in line with the current level of activity. Sees migration toward 9.5% CET1 ratio by the end of 2019. The bank said it is positioned to benefit from corporate tax reform and assumes a 20% federal corporate tax rate effective January 1, 2018; if the effective date is deferred, the bank expects the DTL benefit to be reduced. For 2018, sees 1H commercial loan growth 1.75%-2.25% and consumer loan growth of 2.5%-3%, NIM of 3.1%-3.12%, NII $1.95B-$2B. For 2H, sees commercial loan growth 2%-2.5%, consumer loan growth 2.5%-3%, NIM 3.12%-3.14%, NII $2B-$2.05B. Fifth Third is planning for positive operating leverage in 2018.