PNC Financial Services Group Inc. reported a 13.6% increase in net income in the second quarter as improvements in credit quality helped the bank set aside less money to cover future loan losses.
The Pittsburgh banking company said Wednesday that net income in the quarter rose to $912 million, or $1.67 per diluted share, from $803 million, or $1.47 per diluted share, a year earlier.
It did so even though revenue declined 7.9%, to $3.6 billion, on lower noninterest fee income from things like corporate services, deposit service charges and residential mortgages. Higher income from asset management and consumer services helped cushion the blow of the fall in fees.
PNC recorded a $280 million provision for credit losses, down from $823 million, thanks to better loan performance. Total nonperforming assets decreased 22% to $4.5 billion.
James Rohr, the chairman and chief executive of PNC, played up the improved credit metrics and niche revenue improvements. For example, consumer service fees grew $22 million, or 7%, from the first quarter because of higher customer transaction volumes, including debit- and credit-card purchases and merchant services. Such fees grew $18 million, or 5.7%, from the year ago quarter.
"Our earnings in a soft economy benefited from improving credit quality and exceptional customer revenue growth," Rohr said in a press release.
