PNC Financial (NYSE:PNC) Services' third quarter of 2023 net income has seen a 5% rise to $1.6 billion, even though total revenue dropped by 1% to $5.2 billion. This increase in net income was influenced by higher noninterest income and a decrease in noninterest expense by 4%, reflecting successful cost management efforts. The provision for credit losses also decreased, down from the second quarter's $146 million to $129 million.
Average commercial loans saw a decrease by $5.5 billion to $217.7 billion due to lower corporate banking balances. Contrarily, average consumer loans rose slightly by $0.5 billion to $101.8 billion, driven by an increase in residential mortgage and credit card loans. Delinquencies rose by 6%, primarily due to increased consumer loan delinquencies.
Nonperforming loans increased by 11% to $2.1 billion, largely due to a surge in commercial real estate nonperforming loans, although this was somewhat offset by lower consumer nonperforming loans. There was a decrease in net loan charge-offs, reflecting lower commercial real estate net loan charge-offs. The allowance for credit losses remained stable at $5.4 billion.
Average deposits fell marginally by 1% to $422.5 billion, as growth in commercial deposits was counteracted by lower consumer deposits. Average investment securities similarly dropped by 1% to $139.7 billion, while Federal Reserve Bank balances at the end of the third quarter stood at $41.1 billion.
Average borrowed funds increased by 3% to $67.5 billion, primarily due to parent company senior debt issuances near the end of the second quarter.
In October 2023, PNC declared a quarterly cash dividend of $1.55 per share, which will be payable in November 2023. The company returned $0.6 billion of capital to shareholders via dividends on common shares.
PNC Bank’s average Liquidity Coverage Ratio (LCR) for the third quarter was 132%. The Basel III common equity Tier 1 capital ratio was estimated at 9.8% at the end of the third quarter, up from 9.5% at the end of the second quarter.
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