US lender PNC Financial to cut jobs as quarterly profit drops

Oct 13 (Reuters) – U.S. lender PNC Financial Services Group (PNC.N) said on Friday it would cut about 4% of it workforce as part of its cost reduction plans after posting a drop in profit in third quarter.

The job cuts would reduce its personnel expenses by about $325 million, or 5%, annually, the Pittsburgh-based bank said.

Shares of the bank were up 1.1% in premarket trade.

For the three months ended Sept. 30, PNC reported a 5.7%, decline in revenue to $5.23 billion, missing the Street estimate of $5.32 billion.

Average deposits at PNC fell 3.8% to $422.5 billion, compared with $439.2 billion a year earlier.

The lender earned a profit of $1.57 billion, or $3.60 per share, compared to $1.64 billion, or $3.78 per share. Analysts had estimated a profit of $3.11 per share, according to LSEG IBES data.

PNC said it expects a drop of 1% to 2% in its net interest income (NII)- the difference between what banks earn from lending and pay out on deposits – for the fourth quarter from the preceding quarter.

In the third quarter, it posted a drop of 1.6% in NII from a year earlier.

Some lenders have been cautioning about a weakness in NII growth as borrowing costs surge, dissuading customers from applying for loans, especially as the central bank keeps rates higher for longer.

PNC set aside $129 million as provisions for credit losses, compared to $241 million a year earlier.

Its banking division said earlier this month that it had purchased a portfolio of capital commitments from Signature Bridge Bank for $16.6 billion in an arrangement with the Federal Deposit Insurance Corp as receiver.

Our Standards: The Thomson Reuters Trust Principles.

Read More