PNC Financial Services Group (PNC) combines its asset management, consumer services, corporate services, residential mortgage, service charge on deposits, and net securities gains into its non-interest income. PNC Financial’s non-interest income for 4Q15 increased by 3% compared to the previous quarter, mainly due to higher fee income growth.
Asset management revenue increased $23 million. This was mainly due to stronger equity markets and higher earnings from PNC’s equity investment in BlackRock and to new sales production.
Consumer service fees increased by $8 million due to higher merchant services and credit card activity. Corporate service fees increased by $10 million mainly due to higher merger and acquisition advisory fees and loan syndication fees.
Other non-interest income increased by $21 million. This was led by gains on the sale of Visa Class B common shares of $47 million for the fourth quarter. The income was partially offset by a $12 million decline in residential mortgage banking non-interest income as a result of lower loan sales revenue.
Major players in residential mortgage and asset management (VFH), including BlackRock (BLK), JPMorgan Chase (JPM), and Bank of NewYork Mellon (BK), are focusing on improved performance of their holdings in order to attract new capital.
In 4Q15, PNC’s net interest income increased by $30 million to $2.1 billion from growth in core net interest income. The increase reflected higher securities balances and loan growth, partially offset by lower securities and loan yields.
The net interest margin of 2.70% for 4Q15 increased over the third quarter margin of 2.67% driven by the impact of a reduction in low-yielding balances on deposit with the Federal Reserve, partially offset by lower securities yields. Total revenues for the fourth quarter increased by $78 million to $3.9 billion compared to the previous quarter.