DBRS Rates Fifth Third Bancorp at AA (low)

Dominion Bond Rating Service (“DBRS”) has today initiated coverage of Fifth Third Bancorp (“Fifth Third” or “the Company”) and has assigned ratings as indicated above. All trends are Stable.

The ratings of Fifth Third are underpinned by a predominantly U.S. Midwest retail and small/middle market super-regional banking franchise with consistent quality earnings and solid financial fundamentals including recurrent core and net profitability, improved risk management, superior asset quality over the long term, and sound capitalization levels. Also incorporated in the assigned ratings level is a recent decline in overall Company financial performance and an underperforming share price that now makes acquisitions more expensive for Fifth Third than they have been historically.

Fifth Third has a robust deposit share in its legacy U.S. Midwest footprint but only a developing presence in the Chicago, Detroit, Florida, and Nashville markets. Small- to middle-sized businesses contribute to substantial volumes of transactional deposits, loans, and demand for the banks’ business services. The U.S. Midwest markets are characterized as extremely competitive in challenging economies while the Florida market has strong population and employment growth trends that are favorable to deposit gathering and new business relationships.

Fifth Third earnings are strengthened by strong operating leverage via good expense control and above-peer asset quality in a highly granular loan portfolio. However, while underwriting standards appear robust and existing loan granularity remains high, rapid loan growth brings an additional set of risks and challenges. DBRS notes that the Company also maintains higher than peer capitalization levels which provide additional financial flexibility and an extra safety cushion. DBRS also observes, however, that Fifth Third’s liquidity at the parent company level is significantly below its peers.

The Company operates a “community” retail, commercial, and consumer banking business that is managed via 17 geographically specific regional areas or “affiliates”; each with its own CEO/President to provide localized customer service. Fifth Third’s diversified earnings are dominated by a strong retail franchise with a significant commercial component and material fee contributions from its growing processing and investment businesses. The 1,100 branch network that spans the U.S. Midwest, and the recent expansion to nearly 100 branches in Florida, provides a stable core funding base for the Company. Its low cost of borrowing, however, delivers its competitive overall cost of funds.

Traditionally a perennial high performer, Fifth Third is trying to regain momentum and return to its superior performance levels of a few years ago. In March 2003, the Company signed an agreement with the Cleveland Federal Reserve Bank and State of Ohio to strengthen internal controls and risk management from which it has been fully released. The resulting slowdown in deposit growth from the delayed acquisition undermined management’s interest rate assumptions, precipitating a December 2004 balance sheet restructuring at a pre-tax cost of US$340 million. DBRS believes that the Company has put a much more robust risk framework and infrastructure in place under the management of a Chief Risk Officer; a newly created position as of May 2003. The regulatory event, subsequent shareholder lawsuits, and restructuring have depressed the Company’s share price 35% from its Q1 2002 high, which has made acquisitions difficult and has compelled Fifth Third to replace acquired growth with de novo growth, a core competence.

Fifth Third’s strategic transition under suboptimal conditions has been reflected in its underperformance. De novo expansion is typically a slower growth strategy with expenses paid upfront, and therefore, DBRS sees Fifth Third’s high performance levels returning in the medium rather than the near term at the earliest.

Headquartered in Cincinnati, Ohio, Fifth Third Bancorp is a diversified financial service company engaged in commercial and retail banking, electronic payment processing services, and investment advisory services. The banking business primarily operates under two bank charters, Fifth Third Bank, Cincinnati, Ohio, and Fifth Third Bank, Grand Rapids, Michigan. With over US$103 billion assets and US$23 billion market capitalization as of June 30, 2005, the Company is among the 15 largest bank holding companies in the U.S. Fifth Third had 21,594 employees and 1,098 banking centers (including 130 Bank Mart® locations) as of June 30, 2005.