Mid-sized banking powerhouse
PNC Financial Services (PNC) is expected to report EPS (earnings per share) of $1.76 in the June quarter and $7.16 for fiscal 2016, translating into a price-to-earnings ratio of 11x. The company’s investment income and interest margins are expected to rise due to an expected rise in fee income in 2016. The company reported 1Q16 EPS of $1.68, below the Wall Street estimate of $1.70.
PNC Financial reported a rise in interest income, a fall in non-interest income, and an increased provision for losses from the previous quarter. The company also saw improved expense management and higher loans and deposits. The stock has fallen ~15% over the past six months due to macro factors such as a slowing global economy, weaker equity markets, and reduced capital market activity.
In a company press release, PNC chairman and CEO William S. Demchak stated that “PNC had solid first quarter earnings that were impacted by weaker equity markets and related fees, and continued deterioration in energy related credits. We lowered expenses, maintained a strong balance sheet and continued to return capital to shareholders. We also saw good underlying trends in our businesses to start the year, and we expect that momentum to continue in 2016.”
Diversified financial services
PNC Financial is engaged in retail, corporate, and institutional banking in the United States. The company provides asset management, mortgage banking, and other services. As of March 31, 2016, its total assets, total deposits, and shareholders’ equity stood at $361 billion, $250.4 billion, and $45 billion, respectively. PNC Financial holds a 21.7% stake in BlackRock (BLK) and generates 12% of its net income.
JPMorgan Chase (JPM) beat the estimates by 7% in the first quarter of 2016. It has a weight of 8.1% in the Financial Select Sector SPDR ETF (XLF). Other major competitors reporting earnings this week include Bank of America (BAC), Goldman Sachs (GS), and Morgan Stanley (MS).