The Individual rating of Fifth Third Bancorp has been lowered from A/B to B by Fitch Ratings, which cited concerns about the company's exposure in its home equity and commercial mortgage portfolios, among other factors.The rating outlook for Fifth Third has been revised from stable to negative, although its long- and short-term Issuer Default Ratings have been affirmed at AA-minus/F1-plus. The negative rating actions stem from "deteriorating trends in asset quality and expectations for higher credit costs that will continue to pressure earnings," Fitch said. (Individual ratings, assigned only to banks, assess how a bank would be viewed if it could not rely on external support, and are designed to assess a bank's exposure to and management of risk, Fitch says.) The rating agency said there had been "broad-based deterioration" in net chargeoffs and nonperforming assets since March. "While Fitch had anticipated some deterioration given the Midwestern footprint and exposure to residential and construction lending, the unprecedented stress (particularly in Florida) and difficult market conditions exceeded Fitch internal estimates and support Fitch's outlook revision," the rating agency said.
