Jul. 11, 2014, 3:58 PM
- Wells Fargo’s (WFC -0.7%) disappointing Q2 results could be good news for PNC Financial Services (PNC +0.4%), Fifth Third (FITB +1%), KeyCorp (KEY +0.1%) and Comerica (CMA +0.5%), according to Nomura analysts.
- The strength in WFC’s commercial loan portfolio - total core loan growth came in at 6.9% Y/Y, up from 5.6% last quarter - bodes well for other regional banks, given high C&I growth correlations (~80% or higher); total loan growth correlations also exceed 90% for PNC, FITB, KEY and CMA.
- The firm notes that the R-squared between earning asset growth and net interest income growth is 98% for regional banks, suggesting that stronger loan growth will lead to positive EPS revisions.
Jul. 3, 2014, 10:43 AM
May. 30, 2014, 8:56 AM
May. 28, 2014, 12:25 PM
- "It's going to be a real tough year in origination," PNC Financial chief Bill Demchak tells the crowd at the Deutsche conference. "There is quite clearly much more capacity in the market right now than there is people who want mortgages.”
- Mortgages aren't as large a part of PNC's business as for some competitors, but it's an important product, says Demchak, if only for the fact that it brings people into branches. Income from residential mortgage production fell 31% Y/Y in Q1 for PNC, and makes up about 10% of the bank's overall noninterest income.
May. 21, 2014, 2:33 PM
- The latest issue for the crusader from the NY Dept. of Financial Services is a Reuters report on Ocwen Financial (OCN -2.5%) - along with banks like PNC Financial, and Bank of America (BAC) - routinely demand homeowners promise to say bad things about them publicly in exchange for mortgage modifications.
- "Deeply troubling and offensive," Lawsky tells Reuters, promising an investigation.
- A PNC spokesperson: "These clauses are part of the consideration we receive for agreeing to settle the case. This helps to ensure that the discussion is not re-opened in public after the case has been settled."
- "When [we] take a closer look at some of these non-bank servicers, we find corners being cut, to the disadvantage of homeowners," said Lawsky in a speech yesterday, in which he makes clear his serious issues with the business models of companies like Ocwen (and affiliates like ASPS), Nationstar Mortgage (NSM -0.7%), and Walter Investment (WAC -2.4%).
May. 14, 2014, 10:24 AM| Comment!
May. 14, 2014, 9:34 AM
- Bank of New York's (BK) corporate trust unit is also drawing the interest of PNC Financial and Sumitomo Mitsui Financial Group (SMFG), according to Bloomberg.
- Mitsubishi UJF has previously been reported as maybe prepping a bid as well.
- For PNC, a purchase of the BNY business would return it to a line it exited from 16 years ago when it sold its corporate trust unit. For Sumitomo, it's another Japanese bank looking for growth abroad to offset slow business at home.
- BNY's corporate trust division could be worth as much as $2.5B, according to sources.
May. 6, 2014, 10:52 AM
- Pressed by investors for greater capital returns, but muzzled by the Fed on regular quarterly payouts, a number of large banks are considering asking their D.C. bosses to approve special one-time dividends.
- PNC CEO Bill Demchak - in the bank's recent earnings call (transcript) - said he's discussed the idea informally with regulators, and BB&T (BBT -0.9%) chief Kelly King raised the possibility of a special payout during his call (transcript). U.S. Bancorp (USB -0.6%) hinted at it as well.
- “At some point the regulators will have to say to the banks, ‘You’ve done good, you’ve fixed your internal system, you’ve raised enough capital, now we don’t have any restrictions on your excess capital,’” says RBC's Gerard Cassidy.
- Farr, Miller's Keith Davis isn't too excited by the prospect. “The lack of certainty would not play well ... You want stability, you want visibility, you want to know what your returns are going to be.”
- Previously: UBS higher after beat and special dividend
Apr. 23, 2014, 2:45 PM
- BNY Mellon (BK +2.1%) has hired Goldman Sachs to find a buyer for the unit, reports Bloomberg, and is expected to begin receiving offers in about a month. The corporate trust arm assists companies with making payments on debt they issue as well as helping customers recover funds in event of default.
- The business services about $12T in outstanding debt, with 3.5K employees at 61 global offices, but has become less lucrative since the financial crisis made the packaging and selling of loans a more difficult business. Possible buyers could be large commercial banks looking to build out their own trust business such as Bank of America (BAC), U.S. Bancorp (USB), Wells Fargo (WFC), or PNC Financial, says Guggenheim's Marty Mosby.
- On a recent earnings call, BNY management said run-off in the unit would cut annual revenue by $50M-$75M annually, roughly 0.5% of total bank revenue.
Apr. 22, 2014, 3:02 PM
Apr. 16, 2014, 7:38 AM
- Net income of $1.1B of $1.82 per share compares to $995M or $1.74 per share one year ago.
- Net interest income of $2.2B fell 8% Y/Y with NIM of 3.26% falling 55 bps thanks to lower interest-earnings asset yields and the decline in purchase accounting accretion. Noninterest income of $1.6B gained 1% Y/Y, with residential mortgage income of $161M falling 31%, but asset management income of $364M up 18%.
- Noninterest expense of $2.2B fell 4% Y/Y thanks to personnel cuts.
- Tier 1 capital ratio of 9.7% compares to 9.4% at the end of 2013 and 8% one year ago. Tangible book value per share of $56.33 is up from $54.57 at the end of 2013 and $50.30 one year ago.
- Press release, Q1 results
- CC at 10 ET
- PNC +2% premarket
Apr. 16, 2014, 6:31 AM| Comment!
Apr. 16, 2014, 12:05 AM
Apr. 15, 2014, 5:30 PM
Apr. 3, 2014, 9:53 AM
Mar. 28, 2014, 11:41 AM
- Count Credit Suisse's Moshe Orenbuch as surprised about the Fed's denial of Citigroup's (C -0.5%) capital return plan. Maybe Citi is just too tough for regulators to get their arms around as it is the most complicated of all the bank holding companies.
- Included in the Credit Suisse report is this handy chart of dividends, buybacks, and payout ratios for all of the CCAR banks for 2013 and 2014. Things are loosening up - the median payout ratio (includes dividends and buybacks) this year of 71% compares to 59% in 2013. The dividend payout ratio rises to 26% from 23%.
- It helps to be smaller - among the TBTFs, Citi's payout ratio is just 8%, BofA (BAC) 37%, JPMorgan (JPM) 56%, Morgan Stanley (MS) 41%. Wells Fargo is above the median though, being allowed a payout of 79%.
- The regionals (KRE), trust banks, and credit card companies - for the most part - were all allowed payout ratios above the median.
- The strongest capital returns vs. CS's expectations are those for BNY Mellon (BK), Capital One (COF), KeyCorp (KEY), Huntington Bancshares (HBAN), PNC Financial, and Wells Fargo.
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PNC vs. ETF Alternatives
PNC Financial Services Group Inc is a financial services company. It operates in six segments: Retail Banking; Corporate & Institutional Banking; Asset Management Group; Residential Mortgage Banking; BlackRock; and Non-Strategic Assets Portfolio.
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