PNC beats estimates
PNC Financial Services Group (PNC) reported its 4Q15 earnings on January 15, 2016, and managed to beat analysts’ estimates. It reported net income of $1.0 billion, or $1.87 per diluted common share. Analysts had estimated $1.80 per diluted common share.
PNC Financial reported a rise in interest as well as non-interest income compared to the previous quarter. The company also saw improved expense management and higher loans and deposits. The stock has fallen 13% over the past six months on macro factors such as slowing global economy and declining value of asset classes. The company is expected to benefit from rising interest rates in 2016, which is expected to boost its investment income and interest margins.
In a company press release on January 15, 2016, PNC chairman and CEO (chief executive officer) William S. Demchak noted, “PNC delivered consistent, quality results and advanced our strategic priorities in 2015. We increased fee income, reduced expenses and managed a strong balance sheet that will benefit from rising interest rates heading into 2016. Our strong capital position enabled us to increase the amount of capital returned to shareholders in 2015. We’re positioned to continue to drive long-term value through our execution in 2016 and beyond.”
Diversified financial services
PNC Financial is engaged in retail, corporate, and institutional banking in the United States. The company also provides asset management, mortgage banking, and other services. As of March 31, 2015, its total assets, total deposits, and shareholders’ equity stood at $351 billion, $236.5 billion, and $45 billion, respectively. PNC Financial also holds a 21.7% stake in BlackRock (BLK) and generates 12% of its net income.
JPMorgan Chase (JPM) beat the estimates by 10% in the fourth quarter. It has a weight of 8.1% in the Financial Select Sector SPDR ETF (XLF). Other major competitors that are reporting earnings this week include Bank of America (BAC), Goldman Sachs (GS), and Morgan Stanley (MS).