In the third quarter of 2023, Fifth Third Bancorp (NASDAQ:FITB), guided by CEO Tim Spence, exceeded sales estimates with $2.16 billion and surpassed adjusted EPS predictions at 92 cents. The bank's performance was bolstered by a 44% year-on-year increase in interest income to $2.54 billion. This aligns with real-time data from InvestingPro, which shows a revenue growth of 5.55% for the last twelve months (LTM2023.Q2). Even as net interest income (NII) dipped 4% year-on-year, the company managed to maintain strong operating income margins of 39.75%, as per InvestingPro metrics.
Credit loss provisions fell 25% year-on-year to $119 million due to a shift in deposit mix and repricing dynamics. By the end of the quarter, total average loans and leases reached $122.27 billion. The company also raised its dividend by 6% to 35 cents per share, causing FITB shares to trade higher by 0.65%. This dividend growth is part of a longer trend, as InvestingPro Tips notes that Fifth Third Bancorp has raised its dividend for 12 consecutive years.
On the same day, Morgan Stanley reported a slight increase in group net revenues for Q3, rising to $13.3 billion from last year's $13 billion. However, net income was slightly lower at $2.4 billion or $1.38 per diluted share, compared to the previous year's $2.6 billion or $1.47 per share. The firm's wealth management division reported a pre-tax margin of 26.7% and net revenues of $6.404 billion, reflecting increased asset management revenues on higher average asset levels.
Meanwhile, KeyCorp (NYSE:KEY) reported Q3 FY23 revenues of $1.566 billion, a 17% year-on-year decrease in line with forecasts. Net interest income fell 23.3% to $923 million due to high deposit costs and changes in the funding mix in a high-interest-rate environment. Despite this, the company's EPS of 29 cents beat the estimated 27 cents amidst a stable economic outlook.
All three banks reported improvements in their CET1 capital ratios. Fifth Third Bancorp and KeyCorp both reported a CET1 capital ratio of 9.8%, while Morgan Stanley reported a CET1 ratio of 15.5%, up from 14.8% a year earlier. According to InvestingPro data, Fifth Third Bancorp has a P/E ratio of 7.07, indicating a low earnings multiple, one of the InvestingPro Tips for the company. The bank's performance, coupled with a high shareholder yield, is indicative of the company's commitment to ensuring high returns on book equity for its stockholders, as highlighted by InvestingPro Tips.
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