Fifth Third Bancorp FITB has completed the previously-announced buyout of Provide, a digital platform for healthcare practices.
The acquisition underlines Fifth Third’s continued digital innovation efforts and focus on the healthcare sector. It adds world-class national digital capabilities and will enable the company to address complex lending and banking needs of retail healthcare providers.
In 2018, Fifth Third was an early investor in Provide, and the bank began funding loans through the company’s platform in 2020.
Markedly, Provide will retain its brand identity, operating as an independent business line. It will continue to scale and expand product offerings for doctors and healthcare practices nationwide.
Kala Gibson, head of business banking, noted, “Provide enables us to deliver a client experience that allows healthcare providers to focus on what they do best—providing the care their patients need while we make their banking experience convenient and efficient”.
The bank has been an early investor in Provide since 2018, and started funding loans through Provide’s platform in 2020. Provide has originated more than $1 billion in commercial loans since 2016, while its collaboration with Fifth Third has provided core banking and payment services to numerous clients.
The transaction is a strategic fit as it will enable Fifth Third to offer new clients its range of banking solutions and will facilitate it to capture growth opportunities. It offers scope to diversify and increase fee revenues. Notably, when the deal was announced in June, the company expected to generate $6 million in revenues and $14 million of expenses in the ongoing year from the buyout.
Since the healthcare industry is one of the fastest-growing segments of the U.S. economy, the move is likely to be beneficial for the company.
Currently, Fifth Third carries a Zacks Rank #3 (Hold). The stock has gained 83.9% over the past year, outperforming the industry’s rally of 54.8%.
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