Oct 18 Reuters Fifth Third Bancorp reported a fall in its thirdquarter profit on Friday, as the bank set aside more money to cover for potential loan defaults, sending its shares down 3 in premarket trading.

Banks have been allocating larger reserves as customers deplete their savings built up during the pandemic, resulting in provisions rising to more typical levels.

Fifth Third39;s provision for credit losses jumped to 160 million in the quarter from 119 million a year earlier.

Elevated interest rates also led to fierce competition for deposits among banks, which have bumped up the payout to retain customers from moving to rivals and higheryielding alternatives such as moneymarket funds.

Higher deposit costs, in turn, pressured the net interest income NII of banks.

Fifth Third39;s NII the difference between what banks pay customers on deposits and earn as interest on loans dipped 1 to 1.43 billion.

However, wealth and asset management was a bright spot for the Cincinnati, Ohiobased bank. The unit generated record revenue of 163 million in the quarter, up 12 from the year earlier, while assets under management jumped 21 to 69 billion.

Net income available to common shareholders fell to 532 million, or 78 cents per share, in the three months ended Sept. 30. It had reported 623 million, or 91 cents per share, a year earlier.

The bank expects its fourthquarter NII to rise roughly 1 over the previous three months, while average loans and leases are expected to be…