Fifth Third net down 19 pct on real estate losses

NEW YORK (Reuters) - Fifth Third Bancorp (FITB.O), a large U.S. Midwest bank, said on Tuesday first-quarter profit fell 19 percent, hurt by soaring credit losses tied to residential real estate and homebuilder loans.

Net income for the Cincinnati-based company fell to $292 million, or 55 cents per share, from $359 million, or 65 cents, a year earlier.

Results included $425 million of benefits, or 52 cents per share after taxes, related to credit card network Visa Inc's (V.N) initial public offering last month. They also included charges of 21 cents per share related to insurance policies and 2 cents per share for merger costs and severance.

Analysts on average expected a profit of 49 cents per share, according to Reuters Estimates.

While net interest income rose 11 percent and fee income climbed 43 percent from a year earlier, weaker credit quality offset these increases. Fifth Third set aside $544 million for credit losses, up more than sixfold from a year earlier, and net charge-offs nearly quadrupled to $276 million.

"Nonperforming asset growth and higher loan losses reflect a weaker economic environment and continue to be disproportionately experienced in Florida and Michigan," Chief Executive Kevin Kabat said in a statement. "We expect credit conditions to continue to deteriorate in the near term, and to experience higher nonperforming assets and credit losses during this period."

Fifth Third operates 1,232 banking offices in 11 U.S. states and said it ended March with about $111 billion of assets.

Fifth Third shares closed Monday at $19.38 on the Nasdaq. The shares have fallen 23 percent this year, compared with a 10 percent drop in the Philadelphia KBW Bank Index .BKX.

(Reporting by Jonathan Stempel; Editing by Mark Porter and Derek Caney)