PNC’s Net Interest Income Dips Amid Muted Loan Growth

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PNC Financial Services Group Inc. (NYSE:PNC) missed estimates for net interest income in the first quarter, indicating that the Pittsburgh-based lender continues to struggle with sluggish loan growth.

Following the company’s report of net interest income for the first quarter at $3.26 billion, slightly below the $3.3 billion average of analysts’ estimates, shares experienced a decline. This performance aligns with the company’s forecast given at an investor conference weeks ago.

PNC anticipates its full-year net interest income to decline by as much as 5% from the previous year, reiterating an earlier forecast.

The first-quarter results of US lenders provide insights into the country’s economic status as persistent inflation leads the Federal Reserve to maintain elevated interest rates. PNC’s results mirror those of competitors Wells Fargo & Co. (NYSE:WFC) and JPMorgan Chase & Co. (NYSE:JPM), both reporting net interest income that fell short of analyst estimates.

CEO William Demchak highlighted the quarter’s achievements, including customer growth, expense reduction, increased spot deposits, stable credit quality, and strengthened liquidity and capital positions.

PNC’s shares experienced a 3.5% drop to $144.36 in New York, ranking as the second-worst performance in the 24-company KBW Bank Index.

Despite challenges, the reiteration of full-year net interest income guidance was considered a “modest positive” by analyst David George of Baird.

In February, PNC warned of a potential 5% drop in net interest income for the first three months of the year compared to the previous quarter, surpassing its earlier forecast of a 2% to 3% decrease.

With assets exceeding $500 billion, PNC aims for growth and consolidation in the banking industry. The company plans to invest approximately $1 billion in opening new branches and renovating existing ones. Additionally, it launched a national advertising campaign emphasizing its reliability, amidst efforts to rebuild trust in the industry following Silicon Valley Bank’s failure.

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