5 Quotes From the Fifth Third Bancorp CEO

Updated

A few weeks ago, Kevin Kabat, the Vice Chairman and CEO of Fifth Third Bancorp gave a rather insightful presentation at the Barclay's Financial conference, and below are five quotes that give investors a unique perspective into where the bank suspects it'll be going over the next few years.

"Our strategy is not to be all things to all customers."
Now that is a bombshell. In a world where seemingly every bank is targeting to become a one-stop shop resource for its customers, it is striking to see one CEO plainly state his bank is not attempting to do that.


As a result of this strategy, Fifth Third is focused not simply on adding customers, but ensuring it is fostering a targeted approach that will allow it to provide the best products and experience to specific customers. The hope in all of this is that it will allow it to be a resource to both customers and shareholders.

"We've also seen success from our specialized industry verticals, particularly in health care and energy."
Again Fifth Third's focus on a targeted approach was evident here, as it spoke to its desire to be a market leader in the health-care and energy sectors of its commercial bank. As we all know, these are likely to be two industries facing major change over the next few years and, if the industries shift and grow as they are expected to, Fifth Third could be set to benefit.

Somewhat surprisingly though, Fifth Third actually saw its health-care loans fall from the fourth quarter of 2012 to the second quarter of 2013. Keep an eye on this trend to see if it's actually able to execute on an area of focus.

"Our investments in consumer lending have contributed to significant and noticeable growth in both mortgage and auto lending."
Addressing only the auto-lending piece here, we have seen that Fifth Third has had a key focus on expanding that business, and it is now starting to see results. In fact, in the most recent quarter, Experian reported that Fifth Third had seen its share of new automobile loan originations stand at 1.53%, an increase of 21.3% year over year. By comparison, TD Bank had 1.63% of total automobile loan originations, and saw its market share fall by 12.2%.

"Our total payout ratio in 2012 was about 60% and included both higher dividends and share repurchases."
While, often, banks like Wells Fargo and US Bancorp are lauded for their ability to return capital to shareholders through their high-dividend yields, which stood at 2.9% and 2.5% at the time of writing, Fifth Third also does a great job with its dividends at 2.7%. However, it has also repurchased 5.5% of common stock, meaning it has returned 7.3% to its shareholders through the five quarters that ended on 3/31/13 this year.

"Our strategy is focused on the customer in creating a differentiated experience, offering a unique value proposition and taking a holistic approach to each customer relationship. Ultimately, we believe this allows us to build deeper, more meaningful relationships with our customers that will continue to drive outperformance in our results."
As a closing remark, Kabat concluded with the above. It is striking to see this bank so focused on creating an experience that is different from its competitors, as it hones in on ensuring it is delivering the right services and products to its specific focused group of customers.

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The article 5 Quotes From the Fifth Third Bancorp CEO originally appeared on Fool.com.

Fool contributor Patrick Morris owns shares of US Bancorp. The Motley Fool recommends Wells Fargo. The Motley Fool owns shares of Fifth Third Bancorp and Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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