Fifth Third Bank 2008 Annual Report Download - page 7

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5
A MESSAGE TO OUR SHAREHOLDERS
safe located on their premises and provides same day account availability for the cash.
We also continue to focus on expanding our presence in the Healthcare segment,
and generated 117 percent growth in loans, 5 percent growth in deposits and 36 percent
growth in fee income compared to 2007. Fifth Third has been on the front end of the
shift toward Consumer Driven Health Care in the health insurance market, deeming the
Health Savings Account (HSA) product a Growth Initiative in early 2008. Year-over-
year core HSA deposits are up 84 percent, while total HSA accounts have increased
37 percent. This includes over 350 new employer groups, as well as new individual
consumer relationships from coast to coast.
Fifth Third Processing Solutions continued to deliver solid organic growth compared
to our competitors, particularly in merchant processing, where revenue was up 11 percent
on a year-over-year basis. We’ve targeted the gift-card processing and issuance sector
and have made signicant strides here – we’re now the issuer for several of the nation’s
largest restaurant and pharmacy chains. We also realized a 16 percent increase in card issuer
interchange this year, driven by our success in expanding our credit card portfolio.
We remain committed to protecting our credit customers, introducing new technology
and processes to help shield them from fraud and theft. In 2008, Fifth Third’s card fraud
detection team implemented a process to more quickly identify high-risk credit card
applications. While identity theft and application fraud continue to be major challenges
for the credit card industry, within the rst six months of implementation, our new risk
application has helped prevent approximately $1 million of losses. We also introduced an
enhanced Identity Alert product to further protect the personal and nancial assets of
our customers. This product monitors up to 10 debit and credit cards per customer for
fraudulent on-line activity, provides $10,000 in insurance and fraud resolution assistance,
and enables customers to receive copies of all three major credit reports and scores.
Our Branch Banking operation remains a critical portion of our Company, and in
2008, we opened 20 percent more consumer deposit accounts than in 2007, including
11 percent more consumer checking account openings. Total net new consumer deposit
accounts were up 15 percent from 2007. Additionally, recent investment in our on-line
customer experience drove an increase in on-line account openings of 75 percent from
the prior year.
Our Customer Experience initiative has been a major focus for our Retail Banking
operation. In 2008, our efforts in this area were recognized by two independent studies.
The fourth quarter 2008 ACSI results from the University of Michigan show that we tied
for rst among the U.S. largest banks measured, and in the 2008 JD Power Banking
Satisfaction Study, we were one of only two banks that showed improvement in Customer
Satisfaction. This external validation conrms our actions over the past two years to
drive customer satisfaction and loyalty, and we should see the positive impact of this
improvement on the bottom line when the cycle turns.
We also increased our value proposition to customers by expanding savings account
offerings with three new accounts. The Relationship Savings account is focused on
current checking account customers and pays an attractive rate on mid-tier balances, the
Safe Saver account is focused on customers diversifying account holdings to maximize
FDIC insurance limits, and the High Yield Savings account provides a rate structure with
highly competitive rates for balances over $250,000. In 2008, we generated 146,259
new accounts with $3.73 billion in balances in these new products.
Looking to 2009, we are working on a number of important initiatives in Branch
Banking. Early this year, we introduced mobile banking, which allows customers to manage
their nances from anywhere at any time via their phone or BlackBerry. Additionally, we
will improve online functionality, making it easier to open accounts through our website
and providing a new channel to attract out-of-footprint deposit dollars that will help