What if the government's new pro-consumer laws don't really help consumers - they just shift who gets hit with bank fees?
PNC Financial Service Group, the biggest bank based in Pennsylvania and No. 6 in the U.S., faces a $150 million+ drop in profits from new U.S. limits on debit card overdrafts and credit card charges, notes Richard X. Bove of Rochdale Research after a management-investors' meeting. PNC is also bracing for "more revenue losses" due to additional debit-card fee limits in the federal banking bill. And regulators' demands for more capital "is lowering returns."
Yet "there is a good chance that the bank will actually recapture all of these losses," Bove concludes. "Prices will be raised on all products," and "monthly fees for bank accounts are a high probability."
PNC 's strong deposit base in the mid-Atlantic and Midwest will bring "serious revenue and earnings growth when business conditions improve," predicts Rick Weiss of Janney Capital Markets. It won't hurt that PNC will bring in a net $500 million from its scheduled sale of Global Investment Servicing, in Wilmington and Philadelphia, to Bank of New York Mellon this fall.