Fifth Third Bancorp in Cincinnati warned that it will take a sizeable impairment in the third quarter tied to alleged fraud involving a commercial borrower.
The $210 billion-asset company disclosed that the impairment will range from $170 million to $200 million. The alleged fraud is tied to an asset-backed finance loan. Fifth Third said it is working with law enforcement and third-party advisers to validate losses and determine the final charge.
At the same time, Fifth Third forecast better-than-expected quarterly pre-provision net revenue, driven by broad-based fee income improvement.
Fifth Third also announced that it was selected as the new financial agent for the Treasury Department’s Direct Express prepaid debit card program.