Fifth Third Bancorp
dodged a regulatory bullet Thursday, agreeing to a litany of compliance measures with bank regulators but avoiding a more draconian scenario in which its ability to make acquisitions could have been clipped.
The Cincinnati regional bank agreed to a long list of procedures meant to shore up its risk-management and accounting systems after the company misallocated some funds in its Treasury securities operation several years ago. The mistake prompted an investigation by the Federal Reserve Bank of Cleveland and Ohio government.
The agreement announced Thursday requires Fifth Third to hire consultants who will independently review procedures relating to accounting, risk management, its information systems and corporate governance, and for the bank to prepare a report to rectify any deficiencies that are uncovered.
But the pact doesn't explicitly prohibit the company from pursuing the acquisition strategy that has been central to its ability to continually generate earnings growth -- something analysts
worried would happen since the Treasury botch occurred around the time Fifth Third was merging with Old Kent Financial.
The stock was recently up 74 cents, or 1.4%, at $52.68.