PITTSBURGH, June 21, 2019 /PRNewswire/ -- The PNC Financial
Services Group, Inc. (NYSE: PNC) announced today the results of its
annual company-run stress test conducted in accordance with
regulations of the Board of Governors of the Federal Reserve System
(Federal Reserve) and the Office of the Comptroller of the Currency
(OCC) under the Dodd-Frank Wall Street Reform and Consumer
Protection Act. These company-run stress tests are designed to help
assess whether banking organizations have sufficient capital to
absorb losses and support operations during hypothetical severely
adverse economic conditions over a nine-quarter projection period.
The projection period for the 2019 test covers January 1, 2019 to March
31, 2021.
The supervisory severely adverse scenario provided by the
Federal Reserve and OCC for the 2019 annual company-run stress test
assumes a severe global recession that is accompanied by both a
period of heightened stress in commercial real estate and corporate
debt markets, as well as a sharp drop in asset prices. Under the
hypothetical severely adverse scenario provided by the agencies,
PNC estimates that its ending and minimum regulatory capital ratios
would be as follows:
Basel III
Regulatory Capital Ratios:
Common Equity Tier
1
Tier 1 Risk-Based
Capital
Total Risk-Based
Capital
Tier 1
Leverage
Supplementary
Leverage
|
Ending Q1
2021
8.0%
9.3%
12.0%
8.1%
6.7%
|
Minimum
8.0%
9.3%
12.0%
8.1%
6.7%
|
These results are the product of a forward-looking regulatory
exercise using hypothetical macroeconomic assumptions that are far
more adverse than currently expected by the Federal Reserve or PNC,
and do not represent a forecast of PNC's future capital levels or
anticipated economic conditions.
As required by applicable regulations, capital ratios are
calculated (a) for the first quarter of 2019 using the actual
capital actions expected to be undertaken in that quarter and (b)
for the remaining eight quarters of the stress period, assuming
that (i) there are no repurchases or redemptions of regulatory
capital instruments; (ii) there are no issuances of common stock or
preferred stock (other than equity issuances pursuant to expensed
employee compensation programs); (iii) the dollar amount of
quarterly common stock dividends is equal to the quarterly average
dollar amount of common stock dividends paid during the second,
third, and fourth quarters of 2018 and first quarter of 2019 (for
PNC, the quarterly average amount of common dividends during this
period was $420 million); and (iv)
payments on other regulatory capital instruments are made equal to
the stated dividend, interest, or principal due.
The Basel III risk-based ratios were determined using the
standardized approach for risk weights included in the Basel III
rules.
Results of PNC's annual company-run stress test, including PNC's
estimates of pre-provision net revenue, other revenue, loan and
other losses, net income before taxes, and regulatory capital
ratios for PNC, as well as additional information on the
methodologies used in conducting the stress test, may be found at
www.pnc.com/regulatorydisclosures.
The PNC Financial Services Group, Inc. is one of the largest
diversified financial services institutions in the United States, organized around its
customers and communities for strong relationships and local
delivery of retail and business banking including a full range of
lending products; specialized services for corporations and
government entities, including corporate banking, real estate
finance and asset-based lending; wealth management and asset
management. For information about PNC, visit www.pnc.com.
CONTACTS:
MEDIA:
Marcey
Zwiebel
(412) 762-4550
media.relations@pnc.com
INVESTORS:
Bryan
Gill
(412) 768-4143
investor.relations@pnc.com
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SOURCE The PNC Financial Services Group, Inc.