(Reuters) – Fifth Third Bancorp (NASDAQ:FITB) reported a rise in fourth-quarter profit on Tuesday, driven by a recovery in dealmaking across the industry and higher wealth and asset management fees.
Shares of the lender were up 1.5% in premarket trading. They had jumped 22.6% in 2024.
Banks have benefited from a resurgence in dealmaking activity, fueled by improving economic confidence and greater political certainty. Expectations of additional rate cuts and business-friendly policies under President Donald Trump have fueled optimism for a further revival in investment banking.
Fifth Third Bancorp’s capital markets fees jumped 16% from the year earlier to $123 million, while its wealth and asset management revenue rose 11% to $163 million.
The lender’s assets under management jumped about 17% to $69 billion.
These gains mirror trends seen by larger rivals, benefiting from a rebound of investment banking activity.
Fifth Third’s net interest income (NII), the difference between what banks pay customers on deposits and earn as interest on loans, rose 1.5% to $1.44 billion.
While Fifth Third forecast that NII will remain stable in the first quarter versus the fourth quarter, the bank expects it to grow between 5% and 6% in 2025.
However, provision for credit losses of the Cincinnati, Ohio-based bank jumped to $179 million in the quarter from $55 million a year earlier.
Banks have been allocating larger reserves to cover for potential losses due to bad loans, as elevated interest rates heightened worries about borrowers defaulting on their mortgages.
Net income available to common shareholders rose to $582 million, or 85 cents per share, in the three months ended Dec. 31, from $492 million, or 72 cents per share, a year earlier.