PNC CFO:2011 Net Interest Income To Increase More Than Expected

PNC Financial Services Group Inc. (PNC) said 2011 started better than expected for its core net interest income, and it now expects that figure to improve more than it originally thought, its chief financial officer said Wednesday.

The Pittsburgh bank's CFO, Rick Johnson, speaking at the Citigroup Financial Services Conference in New York, said rates increased more than expected and the balance sheet grew, leading him to make the more-bullish statement.

"Overall business optimism looks a whole lot better even than where we were two months ago," Johnson said.

Net interest income is what the bank earns from lending after its interest costs. PNC says core net interest income is total net interest income, as reported, less related purchase accounting accretion.

For the year, the bank also said it would continue to record lower provisions for loan losses as credit improves. It expects its provision to fall by $800 million next year. The provision was $2.5 billion for all of 2010.

The bank didn't deliver an actual numerical estimate on the net interest income.

On the balance sheet, Johnson said, the bank will keep running off troubled assets while growing some of its core commercial and consumer loans. He said commercial real-estate loans likely would fall for the first half of the year before growing in the second half.

He also said credit-card balances could increase in the latter half of the year.

Johnson reiterated the bank believes it has a chance to grab market share in consumer-checking accounts from peers who are eliminating free checking on account of new regulations. PNC isn't eliminating free checking accounts, it said last week, and Johnson said he sees a "tremendous" opportunity for market share growth because fees will disrupt the market.

Johnson also said the bank would hire 400 client asset managers in the next two years.

PNC shares were down 0.8% to $62.87 in recent trading.

-By David Benoit, Dow Jones Newswires; 212-416-2458; david.benoit@dowjones.com

PNC Financial Services (NYSE:PNC)
Historical Stock Chart
From Jul 2024 to Aug 2024