By Ben Fox Rubin
Regional lender Fifth Third Bancorp (FITB) unveiled a plan to
repurchase up to 100 million shares and potentially boost its
dividend by 25%, after the Federal Reserve didn't object to its
proposed capital actions plan through March 2013.
The share-buyback plan replaces its previous authorization from
2007, which still included 14 million shares. The company had about
919 million shares outstanding as of June 30.
Fifth Third said its board may consider a dividend increase, to
10 cents from eight cents, at its regular September meeting.
With interest rates low and economic conditions uncertain,
regional lenders have had difficulty increasing interest income and
originating more loans. However, lenders across the banking
industry have benefited from improving credit quality on their loan
books that has allowed them to reduce funds set aside for bad
loans.
Last month, Fifth Third said its second-quarter earnings jumped
with the company's loan-loss provisions declining and net interest
income rising.
Shares rose 2.5% after hours to $14.75. As of Tuesday's close,
the stock was up 13% so far this year.
-Write to Ben Fox Rubin at ben.rubin@dowjones.com
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