Fifth Third Bank 2011 Annual Report Download - page 33

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Fifth Third Bancorp 31
the FRB and the FDIC and in consultation with the
President of the United States, finds Fifth Third to be in
default or danger of default;
 Affect the levels of capital and liquidity with which Fifth
Third must operate and how it plans capital and liquidity
levels (including a phased-in elimination of Fifth Third’s
existing trust preferred securities as Tier 1 capital);
 Subject Fifth Third to new and/or higher fees paid to
various regulatory entities, including but not limited to
deposit insurance fees to the FDIC;
 Impact Fifth Third’s ability to invest in certain types of
entities or engage in certain activities;
 Impact a number of Fifth Third’s business and risk
management strategies;
 Restrict the revenue that Fifth Third generates from certain
businesses, including interchange fee revenue generated by
Fifth Third’s debit and credit card businesses;
 Subject Fifth Third to a new CFPB, which will have broad
rule-making and enforcement authorities; and
 Subject Fifth Third to oversight and regulation by a new and
different litigation and regulatory regime.
As the Dodd-Frank Act requires that many studies be conducted
and that hundreds of regulations be written in order to fully
implement it, the full impact of this legislation on Fifth Third, its
business strategies and financial performance cannot be known at
this time, and may not be known for a number of years. However,
these impacts are expected to be substantial and some of them are
likely to adversely affect Fifth Third and its financial performance.
The extent to which Fifth Third can adjust its strategies to offset
such adverse impacts also is not known at this time.
Fifth Third and other financial institutions have been the
subject of increased litigation which could result in legal
liability and damage to its reputation.
Fifth Third and certain of its directors and officers have been
named from time to time as defendants in various class actions and
other litigation relating to Fifth Third’s business and activities. Past,
present and future litigation have included or could include claims
for substantial compensatory and/or punitive damages or claims for
indeterminate amounts of damages. Fifth Third is also involved
from time to time in other reviews, investigations and proceedings
(both formal and informal) by governmental and self-regulatory
agencies regarding its business. These matters also could result in
adverse judgments, settlements, fines, penalties, injunctions or other
relief. Like other large financial institutions and companies, Fifth
Third is also subject to risk from potential employee misconduct,
including non-compliance with policies and improper use or
disclosure of confidential information. Substantial legal liability or
significant regulatory action against Fifth Third could materially
adversely affect its business, financial condition or results of
operations and/or cause significant reputational harm to its
business.
Fifth Third’s ability to pay or increase dividends on its
common stock or to repurchase its capital stock is restricted.
Fifth Third’s ability to pay dividends or repurchase stock is subject
to regulatory requirements and the need to meet regulatory
expectations.