PNC 4Q profit rises on BlackRock acquisition gain; bank sets aside more money for loan losses
By Ieva M. Augstums, APThursday, January 21, 2010
PNC 4Q profit rises despite growing loan losses
CHARLOTTE, N.C. — PNC Financial Services on Thursday said fourth-quarter net income rose sharply, in part due to the sale of institutional asset company Barclays Global Investors.
Still, PNC shares tumbled along with the entire financial sector after President Barack Obama proposed new fiscal restraints for banks.
The Pittsburgh-based bank said it earned $1.01 billion, or $2.17 per share, after losing $269 million a year earlier.
PNC said it would have earned 90 cents per share excluding a $687 million gain related to BlackRock Inc.’s acquisition of Barclays Global. PNC is a part owner of BlackRock, a money manager.
The profit and its $5.08 billion in revenue were better than analysts expected, according to Thomson Reuters and shares rose slightly in premarket trading.
The president said he wanted to limit the size and structures of financial companies to prevent the cascading failures that began in 2008.
That seemed to prompt a sell-off in the afternoon of almost all bank stocks and shares in PNC tumbled 5 percent, or $2.96 to $55.83.
Also, like nearly all banks, PNC has battled mounting loan losses as consumers struggle to repay debt. The bank wrote off more bad debt during the most recent quarter, adding more than $1 billion to cover soured loans, up 15 percent from the previous three months. Still, PNC reported early signs of improvement in its loan portfolio.
“Customer growth and sales of products and services across the franchise were strong, giving us considerable momentum starting into 2010,” Chairman and Chief Executive James Rohr said in a statement.
PNC’s buyout of Cleveland’s troubled National City bank is going better than expected, too. PNC Financial Services Group Inc. said it realized cost savings of $800 million and completed the consolidated of related bank charters late last year.
Over the past week, banks nationwide have reported fourth-quarter results showing a potential rebound from the financial credit crisis a year earlier.
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