Fifth Third CFO Bryan Preston Sees Trump’s 2024 Presidential Election Win Double-Edged Sword

The financial sector is widely believed to be one of the biggest beneficiaries of the 2024 presidential election in which Republican Party’s Donald Trump has emerged victorious. 

Trump’s proposed policies such as tax cuts and emphasis on domestic manufacturing will likely boost economic growth and this in turn would mean more business for banks, which are often referred to as the “lifeblood of the economy.”

The banking sector could also benefit from Trump’s preference for deregulation. Less stringent banking regulations would free up capital for banks and equip them with more funds for lending operations. 

The SPDR S&P Regional Banking ETF ($KRE), an exchange-traded fund that comprises regional banking stocks, has rallied about 10% in the three sessions that followed the Nov. 5 election.

A Trump regime is seen as a welcome relief for the regional banking industry, which faced a crisis in early 2023 that resulted in a series of bank failures and bankruptcies.

Ohio, Cincinnati-based Fifth Third Bancorp.’s ($FITB) CFO Bryan Preston, while responding to an analyst’s question at the BancAnalysts Association of Boston Conference on Friday, said the 2024 presidential election was important for its customers.

Delving into the potential impact of Trump’s victory, he said, “I think the expectation is that it should be a little bit more business-friendly environment.”

"So that should be something that gives some incentive for customers to think about it's time to start investing," he said.

Preston, however, sounded out caution regarding the fiscal situation and what it would mean from a long-term rate perspective. The executive was referring to the likelihood of Trump’s proposed tariffs reigniting inflationary pressure, potentially necessitating elevated interest rate environment.

"We…. are cautious that inflation could potentially come back. And if long rates were to move up further, that would be something that would potentially be a crosswind that would kind of balance some of the benefits that people are expecting out of the election," he said.

Fifth Third has 1,072 branches, and is ranked 8th on that count. As of Sept. 30, 2024, the company had $214 million in assets and $168 billion in deposits.

The regional bank reported earnings miss for its third quarter that ended in Sept. 2024. 

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