CINCINNATI — Fifth Third Bank is pulling back on lending to the struggling office real estate sector.

The Cincinnati-based bank, with 33 branches in the Toledo region, is no longer pursuing new office real-estate loan originations across the company, CEO Tim Spence told investors this month at the Morgan Stanley US Financials, Payments & CRE Conference.

Fifth Third has very limited exposure to the risky office lending sector and is intent on keeping it that way.

Fifth Third spokeswoman Laura Passerallo said just 1.3 percent of the bank’s entire loan portfolio is in office commercial real estate. That’s lower than most of its peers, Mr. Spence told the investors.

Analysts are concerned that banks with big real estate loan portfolios could see defaults as offices continue to suffer high vacancies, in part, from home-office trends and hybrid work schedules that allow employees to work from home some or most of the work week.

First Published June 28, 2023, 8:38 p.m.