TRV The Travelers Companies Inc

FIFTH THIRD BANCORP

Profit, Revenue Rise

Fifth Third Bancorp said its profit and revenue increased as loans and deposits grew.

Earnings beat Wall Street estimates as the company said results were strong despite a "tepid economic environment."

The bank posted earnings of $516 million, compared with $381 million a year earlier. On a per-share basis, earnings rose to 65 cents from 45 cents. Revenue at the Cincinnati-based bank increased 8.3% to $1.75 billion. Analysts had expected 40 cents a share in earnings and $1.52 billion in revenue, according to Thomson Reuters.

Expenses grew by 3%, driven by increased salary and employee benefits that were partially offset by cheaper occupancy costs and equipment expenses. Total business loans grew by 1.5% as consumer loans fell 1.9% due to increased residential mortgage and commercial construction loans. Net interest margin, an important measure of lending profitability, fell to 2.88% from 2.89% last year.

--Austen Hufford

TRAVELERS

Premium Volume Increases to Record

Travelers Cos. said third-quarter operating earnings fell 24%, as premium volume hit a record but the company was up against an unusually strong year-earlier quarter.

Operating earnings of $701 million, or $2.40 a share, were down from $918 million, or $2.93 a share, a year earlier. Operating earnings are the industry benchmark because they exclude realized capital gains and losses in investment portfolios. Analysts expected operating profit of $2.38. Overall, Travelers reported a profit of $716 million, or $2.45 a share, down from $928 million, or $2.97 a share, a year earlier.

New York-based Travelers is one of the first big property-casualty insurers to release third-quarter earnings, and its results are watched closely as a bellwether for others that follow. Travelers, part of the Dow Jones Industrial Average, is a leading seller of insurance to U.S. businesses, and sells car and home insurance to individuals and families.

Net premiums written increased 3.2% to $6.39 billion. Analysts polled by Thomson Reuters expected net premiums written of $6.37 billion. The Travelers auto-insurance business delivered some of the company's strongest premium growth, while the business-insurance unit posted flat net written premiums.

Travelers cited hail storms in the western U.S. and flooding in the southeast as a factor in results. But it and other private-sector insurers largely were spared of major catastrophe damage when Hurricane Hermine landed in Florida but quickly weakened. The storm left extensive power outages over the Labor Day weekend on the East Coast but relatively modest claims volume.

Analysts are expected to focus more on any comments during Travelers' earnings call on Thursday regarding Hurricane Matthew, a major storm that threatened to hit Florida in early October but stayed offshore to then make landfall in South Carolina. Its damage will show up in insurers' fourth-quarter earnings. Matthew caused flooding and widespread power outages as it moved up the U.S. Atlantic Coast and took a toll on North Carolina's agricultural sector.

In the year-earlier period, catastrophe claims were at an abnormally low level, contributing to the tough comparison year-over-year.

More broadly, the insurance industry continues to face challenges from low interest rates, which depress income earned from investing customers' premium dollars until needed to pay claims. Travelers said its investment income fell 5.2%, as its investment team put maturing bonds and new money to work at lower yields.

For the latest quarter, Travelers reported that its catastrophe losses, net of reinsurance, reached $89 million, compared with $85 million a year earlier.

--Tess Stynes, Leslie Scism

CONSUMER TRENDS

Among Unbanked, Prepaid Cards Gain

More households that don't have bank accounts are using prepaid cards for basic financial services, such as making purchases, receiving deposits and saving for the future, a government survey found.

Among U.S. households that have no access to the regular banking system, 27% reported using prepaid cards in the 12 months before June 2015, when the survey was taken, up from 22% in 2013. The Federal Deposit Insurance Corp. survey, released Thursday, found that 9.8% of all households reported using prepaid cards, up from 7.9% in 2013.

The survey, done in partnership with the U.S. Census Bureau, collected responses from more than 36,000 households.

--Yuka Hayashi

(END) Dow Jones Newswires

October 21, 2016 02:47 ET (06:47 GMT)

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