In a market that continues to value physical presence in its communities, Fifth Third is one of the fastest growing US banks nationwide in terms of branch expansion.
It has opened 150 new branches over the past five years, focused on the dynamic southeastern region. It now plans to open a further 60 branches in 2025 and 200 over the next four years.
“You can really see the network investment come through in our numbers, which has also put us in a position where we’re able to accelerate that investment,” says chief financial officer Bryan Preston.
For the second year in a row, Fifth Third has held the fastest deposit growth per retail branch in the US, according to the firm’s calculations based on Federal Deposit Insurance Corporation data. In the southeast, its retail deposits grew by 16% in 2024. The bank boasts clear outperformance of most peers in terms of efficiency and shareholder returns during the year.
There is a linear link, according to Preston, between the proximity to a branch and its sales and marketing success, and credit quality.
“Branch expansion is a big area of strategic emphasis for us,” he says. “As we all saw back in March of 2023, the stability of retail deposits is a huge differentiator for long-term bank performance from a stability perspective, and from a profitability perspective.”
The funding advantage this branch-led expansion gives also feeds into growth in commercial banking
But it is not as simple as planting a branch on a road somewhere in a fast-growing city. The bank has built a sophisticated process for selecting sites, helped by technology. It factors in the road and traffic structure, as well as where else it has and can open branches. It also ponders how it recruits and trains staff, and markets its products, at the time of its launch in an area.
Meanwhile, the funding advantage this branch-led expansion gives also feeds into growth in commercial banking, where it has recently grown its sales forces in states such as Texas and California.
The commercial business is more focused on the lending than the retail business. But when it comes to banking commercial clients, the core focus is to provide less commoditised services.
One example is physical cash management capabilities, helping Fifth Third to become one of biggest transaction banks for petrol stations in the US. Another example is medical receivables, where it has invested in technology to allow customers to automate the matching process between patients, private and state insurance companies, and doctors.
“Almost any bank in the US can sell an ACH payment or a wire,” says Preston. “We have focused on managed services around the payment solution by asking what is upstream or downstream from the payment, what are the frictions, and how can we help solve them.”
Fifth Third has also recently invested in an API platform called Newline, providing embedded finance services to financial technology companies seeking to launch payment, card and deposit products. Launched following Fifth Third’s acquisition of fintech Rize Money in 2023, early customers include Trustly, Nuvei, and Stripe, with many more in the pipeline.
“Newline has more than 200 microservices that can be accessed via modern API structures, giving fintech companies the ability to build payments-related products into their ecosystems,” says Preston.
