PNC Financial fourth quarter profit more than doubles

(Reuters) – PNC Financial Services Group Inc reported a better-than-expected quarterly profit on Friday, helped by higher interest income and consumer loan growth and the U.S. regional lender also forecast mid-single digit loan and revenue growth for 2018.

The quarter included a $1.2 billion net income tax benefit, from revaluation of the company’s deferred tax liabilities, the majority of which are related to the its equity stake in BlackRock Inc.

PNC’s forecast is as expected when compared with analysts who have updated their estimates for the tax reform, KBW analyst Brian Klock said.

Net income attributable to diluted common shares rose to $2.01 billion, or $4.18 per share, in the fourth quarter ended Dec. 31, from $973 million, or $1.97 per share, a year earlier.

Excluding items, the Pittsburgh-based bank earned $2.29 per share, beating analysts’ average estimate of $2.20 per share, according to Thomson Reuters I/B/E/S.

The company’s alternative GAAP measure of profit for the quarter also included a one-time benefit of $911 million due to cuts in corporate tax rates.

While bigger banks such as Morgan Stanley and Goldman Sachs Group Inc are expected to take a hit in Q4 from the new tax law, PNC gained from the Tax Cuts and Jobs Act.

Net interest income at PNC rose 10 percent to $2.35 billion.

Commercial lending balances rose 7 percent over last year to $147.4 billion, as market activity heightened in anticipation of the tax bill.

2017 saw an industry-wide softness in commercial and industrial (C&I) loans, but analysts say C&I lending could rise this year, in part due to the tax changes.

“PNC and its entire peer group is expecting 4 percent total (loan) growth, with 5 percent for C&I growth in 2018,” Klock said.

Reporting By Pallavi Dewan and Aparajita Saxena in Bengaluru; Editing by Patrick Graham and Shounak Dasgupta

Filed in: Top News Tags: 

You might like:

More than 10 percent of $3.7 billion raised in ICOs has been stolen: Ernst & Young More than 10 percent of $3.7 billion raised in ICOs has been stolen: Ernst & Young
Exclusive: Ackman cuts staff, shuns limelight as he seeks to turn around fund Exclusive: Ackman cuts staff, shuns limelight as he seeks to turn around fund
Hedge fund Third Point pushes Nestle to do more faster: letter Hedge fund Third Point pushes Nestle to do more faster: letter
New Ocado ecommerce deal turns screw on bearish hedge funds New Ocado ecommerce deal turns screw on bearish hedge funds
Stock-focused hedge funds post biggest gains among top performers Stock-focused hedge funds post biggest gains among top performers
U.S. hedge fund Tiger Global has invested more than $1 billion in Barclays: FT U.S. hedge fund Tiger Global has invested more than $1 billion in Barclays: FT
Morgan Stanley raises targets, but Wall Street wants more Morgan Stanley raises targets, but Wall Street wants more
Ex-Bank of America executive Malik to launch fund advisory firm Ex-Bank of America executive Malik to launch fund advisory firm

Leave a Reply

Submit Comment
© 2018 Stock Investors News. All rights reserved. XHTML / CSS Valid.