July 13, 2018 / 11:07 AM / in 2 months

PNC Financial profit tops estimates on higher interest rates

(Reuters) - PNC Financial Services Group Inc (PNC.N) on Friday posted a quarterly profit that beat analysts’ estimates, driven by higher net interest income and improved fee income, sending shares of the regional lender up more than 1 percent in premarket trade.

FILE PHOTO: A PNC Bank branch is shown in Charlotte, North Carolina April 18, 2012. REUTERS/Chris Keane

The growing U.S. economy has triggered demand for loans, which along with rising interest rates has benefited U.S. banks.

PNC Financial, one of the largest U.S. lenders by assets, said its loan portfolio grew 2.2 percent to $222.8 billion with commercial lending accounting for nearly 70 percent of total loans.

Net income attributable to diluted common shares rose to $1.28 billion in the second quarter ended June 30, from $1.03 billion, a year earlier.

On a per share basis, the Pittsburgh-based regional bank earned $2.72, blowing past analysts’ estimates of $2.58, according to Thomson Reuters I/B/E/S.

Net interest income rose 7 percent to $2.41 billion, helped by higher interest rates, which the U.S. Federal Reserve has raised four times since the second quarter of last year.

Non-interest income climbed 6 percent to $1.91 billion due to growth in asset management and consumer service revenue, which offset a decline in residential mortgages.

Provision for loan losses came in at $80 million, down 18 percent from a year ago, and below the $100 million to $150 million forecast in April.

Expenses rose 4 percent to $2.58 billion from $2.48 billion a year earlier due to ongoing business investments, the company said.

Total revenue rose 6.5 percent to $4.32 billion from $4.06 billion a year ago.

Shares of the bank were up 1.4 percent at $139.97 in premarket trading on Friday.

Reporting by Nikhil Subba in Bengaluru; Editing by Bernard Orr

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