By John Byczkowski
The Cincinnati Enquirer

Fifth Third Bancorp posted record profits for 2003, the company reported Thursday. But the Cincinnati-based regional bank's growth of 7.3 percent was its second-lowest in the past 15 years.

Still, the company worked hard for the growth it got, boosting lending to consumers and businesses by $6 billion and attracting $5 billion in new deposits. For 2004, the company expects interest rates to rise modestly, which should boost profits.

"Overall we feel like we overcame some significant challenges this year, with the interest rates at four-year lows and a difficult year for credit," and still produced earnings growth, CEO George Schaefer Jr. said.

For all of 2003, the bank had $1.75 billion in net earnings, up from $1.63 billion in 2002. Earnings per share grew to $2.97, from $2.75 in 2002.

In the fourth quarter of 2003, net income was $460.5 million, up 9 percent from the same quarter a year earlier. Earnings per share were 80 cents in the fourth quarter, up from 72 cents in the same quarter of 2002.

The bank finished the year with assets of $91.1 billion, up almost 13 percent from 2002.

Since 1988, only 2001 saw slower profit growth for Fifth Third. Net earnings fell 4 percent that year, in part on expenses related to the acquisition of Old Kent Financial Corp. Since 1988, Fifth Third has averaged net earnings growth of almost 24 percent a year.

During the fourth quarter, Fifth Third completed the sale of its corporate trust business to the Bank of New York, for a gain of $40 million.

Fifth Third provided no update on the continuing investigation by the Federal Reserve and the state of Ohio into alleged accounting irregularities at the bank. The company expects the investigation to be wrapped up in March.

Shares in Fifth Third closed at $57.96, down 42 cents.

E-mail johnb@enquirer.com