Interest rate hikes help drive PNC profits
Pittsburgh Post-Gazette
PNC Financial Services Group, Pittsburgh’s biggest bank, on Friday reported second-quarter profits climbed 12 percent on higher revenue.
Net income attributable to common shareholders was $1.03 billion, up from $914 million in the same quarter a year ago. Per-share earnings rose 15 percent to $2.10 from $1.82.
Revenue hit $4.06 billion, up 7 percent from $3.79 billion, as both net interest income and non-interest income rose.
“This is a pretty good quarter for us. I’m particularly pleased with our loan growth this quarter,” Chairman and CEO William Demchak told analysts in a conference call.
Loans grew $5.2 billion, or 2 percent, to $218 billion at the end of June from the end of March. The commercial sector accounted for $5.1 billion of the increase.
PNC’s bottom line is benefiting from increases in short-term interest rates by the Federal Reserve, which raised its benchmark federal funds rate three times in the last six months, most recently in mid-June to a still-low range of 1 percent to 1.25 percent.
“Obviously, we were pleased to see another interest rate hike,” Mr. Demchak said.
Economists at PNC, the sixth largest bank in the nation with roughly $370 billion in assets, expect one more rate hike this year in December.
PNC plans to expand its middlemarket business banking services into the Denver, Houston and Nashville areas next year following expansion into Dallas, Kansas City and Minneapolis at the start of this year. The bank has no plans to launch consumer banking operations in those areas, Mr. Demchak said.
Shares lost 15 cents Friday, or 0.12 percent, to close at $127.17.