PNC profit rises thanks to fee-based units
PNC Financial Services Group, Pennsylvania's biggest bank, said yesterday that its fourth-quarter profit increased 5.9 percent on revenue from fee-based units, including those that process business transactions.
PNC Financial Services Group, Pennsylvania's biggest bank, said yesterday that its fourth-quarter profit increased 5.9 percent on revenue from fee-based units, including those that process business transactions.
Net income rose to $376 million, or $1.27 a share, from $355 million, or $1.20 a share, a year earlier, the Pittsburgh company said.
PNC has the third-most branches in the Philadelphia area among banks serving the region, with 149 local offices as of June 30, 2006, according to the Federal Deposit Insurance Corp.
Excluding an $8 million after-tax charge related to BlackRock Inc.'s acquisition of Merrill Lynch & Co. Inc.'s money-management business, the bank earned $384 million, or $1.30 a share.
Chief executive officer James Rohr has expanded into fee-based services after 17 interest-rate increases by the Federal Reserve narrowed profit margins on lending. PNC owns about 35 percent of BlackRock, which became the fifth-largest investment manager in the United States after completing its $9.4 billion purchase of Merrill Lynch's money-management business in September. PNC also is moving into the Washington region by acquiring Mercantile Bancshares Corp.
"The diversity of our business mix makes us less reliant on any one market segment or geography for income," Rohr said in a conference call with investors. "Our diversity delivers a high proportion of fee revenue to total revenue."
Net interest margin, the difference between what a bank pays for deposits and what it charges on loans, narrowed to 2.88 percent in the fourth quarter from 2.89 percent in the third quarter and 2.96 percent a year earlier. Return on average shareholders' equity fell to 13.8 percent from 16.9 percent in the previous year's period.
Shares of PNC dropped 78 cents, to $73.14, in New York Stock Exchange composite trading.
Separately, BlackRock reported fourth-quarter earnings more than doubled after the acquisition of Merrill Lynch's unit, the largest takeover in the history of the mutual fund industry.
BlackRock's net income increased to $169.4 million, or $1.28 a share, from $72.9 million, or $1.09 a share, the New York-based company said yesterday in a statement. Revenue also doubled to $1.02 billion.
For PNC's full fourth-quarter and year-end financial report, go to:
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