Fifth Third disposes majority stake in processing unitOn June 30, Fifth Third Bancorp (FITB) sold a 51% stake in its processing business to Advent International, the leading global buyout firm. The deal is valued at $2.35 billion, before any valuation adjustments.The deal was announced in March this year. Fifth Third will retain the remaining 49% stake in the new company and will also keep its credit card issuing business, including retail credit card and commercial multi-card services.We are encouraged with this transaction, as it will enable Fifth Third to focus more on its core business while boosting its Tier 1 common equity.Fifth Third will realize a pre-tax gain of around $1.7 billion or $1.0 billion post-tax on the transaction. Approximately $1.2 billion will be contributed from this transaction to the bank's Tier 1 equity. ...

Fifth Third Bancorp (FITB) declared today that it has agreed to sell 51% of its payment processing business to Advent International Corp, a private-equity firm.

The Cincinnati-based bank also stated that it will receive 561 million in cash from Advent for this deal.

Fifth Third said that it will retain the remaining stake in the new company, Fifth Third Processing Solutions LLC, which is valued at $2.35 billion. It also said that it would provide $1.25 billion in bank loans to fund the new company.

The recent deal will boost Fifth Third's capital base after a $3.45 billion injection from the government. The company expects the deal to raise its Tier 1 capital by approximately $1.2 billion.

Shares of Fifth Third were up more than 4% in the morning trade.

FITB is a Zacks #3 Rank ("Hold") stock.

"FITB" Free Stock Analysis: Buy? Sell? Hold?...