Fifth Third Bancorp (FITB) said its asset management arm will
shed some assets, including roughly $5 billion of money market
assets being acquired by investment manager Federated Investors
Inc. (FII).
Under Fifth Third's deal with the firm, the money market assets
will be reorganized from four Fifth Third money market funds into
four existing Federated money market funds with similar investment
objectives.
The transaction, expected to be completed in the third quarter,
isn't seen having a material impact on Fifth Third's results.
"This action reduces risk and moves us more closely to trusted
advisor status by being able to offer clients a broader choice of
investment products," said Chief Executive Kevin T. Kabat.
Also Thursday, the bank said Touchstone Advisors, a mutual fund
unit of Western & Southern Financial Group Inc., will acquire
the assets of 16 of its mutual funds. Fifth Third Asset
Management's affiliated investment mangers will continue as
sub-advisors for some of the funds.
The moves come after Fifth Third saw its request to raise its
dividend and begin buying back shares rejected by the Federal
Reserve last month following completion of the regulator's latest
"stress tests" for the nation's largest banks.
Fifth Third at the time declined to say why the Fed objected,
citing regulatory reasons, but said it would resubmit the plan "as
soon as practicable."
Shares were recently up 6 cents to $14.54.
-By Mia Lamar, Dow Jones Newswires; 212-416-3207; mia.lamar@dowjones.com