Fifth Third Bancorp Expects Strong Q3 Performance Driven by NII and Fee Income

For the third quarter, FITB expects NII to increase by 2-2.5% from the second-quarter baseline of $2.22 billion and non-interest income to rise by 1-3% from $1.04 billion. Non-interest expenses are anticipated to decline by 1-2% from $1.86 billion.

The positive outlook for NII is a result of growth in earning assets, fixed-rate asset repricing, and strong deposit generation. Following the Comerica acquisition, FITB has intentionally developed a more asset-sensitive balance sheet, positioning the bank well for a higher-rate environment. Preston indicated that ongoing growth in earning assets will further support NII. The bank's management expects the net interest margin (NIM) for the third quarter to remain in the mid-3.30% range, with potential to approach nearly 3.40% as cash accumulated during the Comerica conversion is reinvested into earning assets.

Fee income is also contributing to revenue growth. FITB noted that wealth management and commercial payments have each achieved over $1 billion in annualized revenue, both likely to maintain high-single-digit growth shortly. Additionally, capital markets are generating approximately $600 million annually, with significant room for future growth.

With the Comerica conversion largely finished, FITB is focusing on acquiring new customers and strengthening relationships in lending, deposits, and capital markets, which will diversify its revenue streams. The anticipated increase in NII and overall business strength are expected to boost revenue for the third quarter significantly. The Zacks Consensus Estimate for FITB’s 2026 revenue shows a projected year-over-year increase of 42.5%.

Outlook updates from other banks at the Barclays Conference included KeyCorp and Huntington Bancshares. KeyCorp’s 2026 revenue outlook has improved to an expected increase of about 8%, up from a previous range of 7-8%, due to higher fee income and a projected 9-11% increase in NII. In contrast, Huntington Bancshares has reduced its 2026 NII growth forecast to 35% from a previously estimated 39-43%, which may impact revenue growth owing to increased deposit costs and competitive pricing. However, Huntington projects stronger noninterest income growth toward the upper end of 31-33%.

In the past six months, Fifth Third's shares have risen by 16.3%, compared to an 18.1% growth rate within the industry. Currently, Fifth Third Bancorp holds a Zacks Rank #3 (Hold). The article also references a report by Zacks Investment Research.