Fifth Third Bank 2003 Annual Report Download - page 7

How important is maintaining a strong
balance sheet to Fifth Third?
Financial strength has always been a vitally
important aspect of Fifth Third. A strong
balance sheet and low risk profile are becoming
increasingly important as competition intensifies
across the financial services landscape and financial
markets become more complex. More specifically,
we are first and foremost concerned with earning a
high return on invested capital, but a strong balance
sheet can provide a higher margin of safety for our
shareholders and a means to take advantage of
expansion opportunities when others in the industry
begin to struggle. It’s important to our shareholders
and our customers to know that they are doing
business with an institution that will be here for them
in the future.
Is the affiliate banking model scalable and at
what point does it become strained by the
sheer number of affiliates?
I truly believe that a decentralized model is
the most logical organizational structure to
compete in the banking industry - it keeps decisions
close to the customer and does not sacrifice the
relationship nature of our business. Our affiliates are
individually managed for growth, capitalizing on the
benefits of several small companies, instead of one
large one. I’m not entirely sure what the magic
number of affiliates is, but I do feel very confident in
the ability of our risk management and operational
infrastructure to support growth and expansion into
new markets for many years to come.
As Fifth Third becomes larger and continues
to enter new markets, are you concerned by
the ability to place experienced Fifth Third
managers in these markets?
Not at all. The key to our success at Fifth
Third is constantly evaluating performance at
the smallest levels of the organization and making
every effort to give the best bankers more
responsibility and opportunities for success. What
has become clear is that successful managers at Fifth
Third have several traits in common: a strong work
ethic, an entrepreneurial spirit and a desire to win. In
fact, as I look across our management ranks, I find
that it’s fairly evenly split between those that have
grown up at Fifth Third, those that have joined us in
an acquisition and those that were hired from other
companies.
Fifth Third has experienced very rapid growth
in its sales force over the last couple of years.
What attracts people to work at Fifth Third?
I think our industry has seen a number of
companies move toward greater
centralization of operational control over the last
few years. This has sometimes resulted in strange
reporting structures that largely remove decision
making ability and creativity from the hands of local
relationship bankers. I think Fifth Third offers several
advantages, most notably, the ability to individually
tailor financial solutions for their customers and the
ability to build personal wealth by sharing in the
ownership and success of the company.
Where do you see Fifth Third
in five years?
I think we will continue to focus on what we
do best: Retail and Commercial Banking,
Investment Advisors and Electronic Payment
Processing. We like the businesses we’re in and
believe our operating model is the best in the
industry. Other than that, we will probably have a
presence in a few more metropolitan markets and
hopefully a larger market share in our existing
markets, but I expect that we will look a great deal
like we do today.
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