TARP Beneficiary Fifth Third to Redecorate Office

Story from the Wall Street Journal

Fifth Third Bancorp is renovating its executive suite after receiving an injection of $3.45 billion in rescue funds from the U.S. government.

Nine new offices are being created on the top floor of the Cincinnati bank's headquarters in the downtown William S. Rowe Building, according to documents filed with the city.

The bank applied for a building permit after it had been approved to receive funds from the Troubled Asset Relief Program. On the permit, it listed $165,000 in costs for the 11,000-square-foot project. A city plan examiner produced a higher estimate of $220,000. The final total could be much higher. City Inspector Larry Kieffer said the estimates likely exclude architect's fees and furniture.

Like new jets, employee junkets and sports sponsorships, office renovations are coming under scrutiny at financial institutions taking U.S. bailout capital.

The money involved in Fifth Third's renovation is relatively paltry. Still, "because of the public funds involved, you have to be aware there is going to be greater scrutiny than before and have to make a stronger case than you would months ago," said Charles Elson, director of the Weinberg Center for Corporate Governance at the University of Delaware.

Bank spokeswoman Debra DeCourcy said the architect's fees are "standard" and "in line with what we pay for other alterations to the building." The expenses, she said, "are immaterial to the operation or costs of the bank."

Only nine U.S. banks have received more federal money than Fifth Third, the nation's 14th largest bank by assets and the largest still based in Ohio. The bank swung to a loss of $2.2 billion in 2008 from the year-earlier profit of $1.1 billion, as it was hit by rising loan losses in Michigan and Florida.

Ms. DeCourcy called the project a "reconfiguration" of the bank's executive floor, making room for executives who report directly to Chief Executive Kevin Kabat and now are spread across four Cincinnati buildings.