After eight years of service at Fifth Third, CEO Kevin Kabat has decided to retire at the age of 58, according to the company’s statement. Greg D. Carmichael, current president and chief operating officer, will become president and chief executive officer as of November. Shares declined 1.1 percent in early trading, cutting Fifth Third’s year-to-date gain to 0.6 percent, reports The Wall Street Journal.
As banks continue to increase their mobile and online services, Carmichael’s appointment marks the beginning of a series of structural changes Fifth Third will face. The Cincinnati-based financial company plans on consolidating or selling about 100 of its branches and about 30 other properties, reports WSJ. According to Evercore ISI analysts, this change in leadership will give the bank “fresh eyes at the top” after “several years of lagging performance.”
Kabat has served as CEO since April 2007. His career included 33 years of combined service at Fifth Third and a predecessor. During his tenure, WSJ reports, Fifth Third’s profit increased to $1.47 billion in 2014 from $1.08 billion in 2007. Like many other banks, however, Fifth Third was hit by the financial crisis. At the time, Kabat sold loans and increased reserves for troubled loans, as well as simplified the bank’s business.
Kabat said, “Greg will be a terrific CEO. As the president and chief operating officer, he has demonstrated an unwavering focus on our customers, employees, communities and shareholders. Greg will continue to bring his passion to leading the Fifth Third organization during an era of continued change in how we deliver value to all of our constituents.”
Carmichael joined Fifth Third in 2003, leading IT. He became chief operating officer in 2006, and by 2009 his responsibilities had expanded to include leading the Retail Bank, Investment Advisors, Business Banking and all affiliate banks and markets. Carmichael was named president in 2012, when the national Commercial line of business was added to his role.