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Fifth Third (FITB) Closes Its Acquisition of Dividend Finance

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Fifth Third Bancorp (FITB - Free Report) recently announced the completion of its acquisition of Dividend Finance, which is a leading fintech point-of-sale lender providing financing solutions for residential renewable energy and sustainability-focused home improvement.

Dividend Finance enables contractors to offer the best financing experience for their customers through the company’s one-stop solution for a range of loan products. Its digital lending platform is beneficial for contractors, giving them the ability to win new business and borrowers.

The acquisition, announced in January, is accretive to Fifth Third as it enhances its digital service capabilities by providing its customers solar and sustainable home improvement options.

It has also added to Fifth Third’s renewable energy portfolio, supporting the bank’s commitment in environmental leadership in financial services. The deal is in line with FITB’s sustainable finance goal of $8 billion to be achieved by 2025, as set in 2020. This includes lending and financing for solar, wind, geothermal, biomass and hydropower. Through 2021, Fifth Third has achieved 91% of its 2025 goal.

Apart from this, Fifth Third is focused on environmental sustainability strategies that include reduction of the company’s environmental footprint, managing climate-related risks and supporting its customers and communities in its transition to a more sustainable future.

Fifth Third has been growing inorganically over the past few years. In August 2021, the company completed the buyout of Provide, a digital platform for healthcare practices. Further, in 2018, it acquired Coker Capital, a healthcare merger and acquisition advisory firm. FITB’s acquisition of Dividend Finance, along with these buyouts, is expected to expand its commercial verticals and drive revenue growth.

Over the past six months, shares of FITB have lost 17.2% compared with 22.1% decline of the industry it belongs to.

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Fifth Third currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Banks Enhancing Digital Capabilities

Fifth Third isn’t the only one that is strengthening digital offerings. Earlier this month, Truist Financial (TFC - Free Report) acquired the gamified finance mobile app, Long Game. Long Game changes the way people engage with their banks. The finance mobile app uses prize-linked savings and casual gaming to motivate smart financial behavior.

Truist Financial is expected to use Long Game’s innovative technology to inspire and build better lives and communities. Long Game’s modern architecture is aligned with Truist Financial’s existing technology stack, which will increase client engagement, savings and financial education, particularly among the millennial and Gen Z populations.

Likewise, in May 2022, KeyCorp (KEY - Free Report) acquired PA-based GradFin from Philadelphia. This will strengthen the company’s digital offering capabilities.

The transaction is in sync with KeyCorp’s efforts to undertake strategic partnerships with Fintech companies and cater to clients’ ever-changing needs. Last year, KEY acquired a B2B-focused digital platform, XUP Payments, and a data analytics-driven consultancy firm, AQN Strategies LLC.


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