We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
PNC Financial (PNC) Lowers Q1 NII View on Soft Loan Growth
Read MoreHide Full Article
At the Bank of America Financial Services Conference, PNC Financial Services Group (PNC - Free Report) lowered its first-quarter 2024 net interest income (NII) guidance on dismal loan growth.
The company expects NII to sequentially dip 3-5% compared with its previous guidance of a decline of 2-3%. The bank has softened its guidance for NII due to lower-than-expected average loan growth and a slower increase in utilization rates than a typical first quarter.
PNC had projected average loan growth to be flat in the quarter. But now it expects the metric to fall 1%. Nonetheless, it has retained the full-year loan growth guidance of 3-4%. PNC also noted that while deposits were down a little bit for in the first quarter, deposit trends are better than expected, with easing pricing competition. For 2024, deposits are expected to decline.
This aside, the company’s first-quarter guidance for other metrics has been intact. It expects total revenues to sequentially decline 3-4% on a 6-8% decline in fee income and a fall in NII.
Also, expenses (on a non-GAAP basis) are expected to decline 3-4%, while net charge-offs are expected to be $200-$250 million.
For 2024, the company expects period-end loans to rise 3-4% and average loans to be up 1% from 2023 reported figures. Management suggests the top line to be stable to down 2%. NII is anticipated to decline 4-5%.
Non-interest income is projected to be up 4-6%. The company is expecting capital markets and advisory fee income to jump 20% from 2023. Revenues from cash and cash management are anticipated to rise in low to mid-single digits. Management is projecting lending and deposit-related income to decline in mid-single digits, suggesting the likelihood of lower service charges on deposits. Further, fee income from asset management and brokerage services is envisioned to be stable to rise slightly.
The company has undertaken cost-containment measures, targeting a total cost reduction of $750 million in 2024 through a Continuous Improvement Program and workforce reduction. With this, adjusted non-interest expenses are forecast to be flat.
PNC shares have declined 6.2% in the past year against the industry’s 7.6% growth.
Image: Bigstock
PNC Financial (PNC) Lowers Q1 NII View on Soft Loan Growth
At the Bank of America Financial Services Conference, PNC Financial Services Group (PNC - Free Report) lowered its first-quarter 2024 net interest income (NII) guidance on dismal loan growth.
The company expects NII to sequentially dip 3-5% compared with its previous guidance of a decline of 2-3%. The bank has softened its guidance for NII due to lower-than-expected average loan growth and a slower increase in utilization rates than a typical first quarter.
PNC had projected average loan growth to be flat in the quarter. But now it expects the metric to fall 1%. Nonetheless, it has retained the full-year loan growth guidance of 3-4%. PNC also noted that while deposits were down a little bit for in the first quarter, deposit trends are better than expected, with easing pricing competition. For 2024, deposits are expected to decline.
This aside, the company’s first-quarter guidance for other metrics has been intact. It expects total revenues to sequentially decline 3-4% on a 6-8% decline in fee income and a fall in NII.
Also, expenses (on a non-GAAP basis) are expected to decline 3-4%, while net charge-offs are expected to be $200-$250 million.
For 2024, the company expects period-end loans to rise 3-4% and average loans to be up 1% from 2023 reported figures. Management suggests the top line to be stable to down 2%. NII is anticipated to decline 4-5%.
Non-interest income is projected to be up 4-6%. The company is expecting capital markets and advisory fee income to jump 20% from 2023. Revenues from cash and cash management are anticipated to rise in low to mid-single digits. Management is projecting lending and deposit-related income to decline in mid-single digits, suggesting the likelihood of lower service charges on deposits. Further, fee income from asset management and brokerage services is envisioned to be stable to rise slightly.
The company has undertaken cost-containment measures, targeting a total cost reduction of $750 million in 2024 through a Continuous Improvement Program and workforce reduction. With this, adjusted non-interest expenses are forecast to be flat.
PNC shares have declined 6.2% in the past year against the industry’s 7.6% growth.
Image Source: Zacks Investment Research
PNC presently carries a Zacks Rank #3 (Hold).
Bank Stocks Worth Considering
A couple of better-ranked stocks from the banking space are JPMorgan Chase & Co. (JPM - Free Report) and Park National Corporation (PRK - Free Report) . JPM currently carries a Zacks Rank #2 (Buy) and PRK sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
JPM’s earnings estimates for 2024 have moved marginally upward over the past 30 days. In the past year, its shares have risen 30.6%.
The Zacks Consensus Estimate for PRK’s current-year earnings has moved north 4.9% over the past 30 days. Its shares have risen 0.6% in the past year.