PNC’s retail banking
business unit has reported a near profit wipeout, with net income
down 78.5% from $144m in fiscal 2010 to only $31m.
PNC blamed Regulation E
and its restrictions on overdraft fees and the effects of Dodd
Frank, limiting intercharge rates on debit card transactions, for
lost revenue of $275m in fiscal 2011.
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Group wide, PNC reported
a full year profit for fiscal 2011 of $3.1bn, down 8.8% from the
previous year, not helped by increased margin pressure and the
costs of increased regulation.
Net interest income
declined by 5.7% to $8.7bn for the 12 months to 31 December – net
interest margin fell by 22 basis points to 3.92% – while
non-interest income fell by 5.4% to $5.6bn.
Other less positive
metrics included a 7 percentage point increase in PNC’s cost-income
ratio in fiscal 2011 to 64%.
PNC retail banking
highlights in the past year included total checking account numbers
increased by 296,000 in 2011, including 41,000 from acquisitions,
or almost 4 times the growth in 2010.
Group highlights
included a 54% fall in provision for credit losses, to $1.1bn from
over $2.5bn the year ago period.
PNC ended 2011 with a
branch network of 2,511 outlets; during 2011 it acquired 27
branches from regional lender Flagstar.
Total deposits inched up
by 2.5% in 2011 to $188bn while total loans increased by 5.6% to
$159bn; total assets increased by 2.6% to $271.2bn.
In December 2011, PNC received regulatory approval
for its acquisition of the US-based retail banking unit of Royal
Bank of Canada.
PNC will look to close
the deal in the first quarter; the acquisition will add more than
400 branches in North Carolina,
Florida, Alabama, Georgia, Virginia and South
Carolina.
PNC chairman and CEO
James Rohr said:
“PNC had a solid year of accomplishments in a
challenging regulatory and economic environment. We increased
market share across our businesses by continuing to grow the number
of customers we serve.”
