PNC Financial to cut jobs after profit drops, revenue misses estimates

(Reuters) -PNC Financial Services Group said on Friday it would reduce its staff by about 4% as part of a cost-cut initiative after the U.S. lender’s third-quarter profit declined and revenue missed estimates.

The company said the job cuts would reduce its annual personnel expenses by about $325 million, or 5%.

Shares of the Pittsburgh-based bank, which said the layoffs would be nearly completed by the end of the fourth quarter, rose 1.1% in premarket trading.

Several regional as well as big banks have cut jobs in recent months to better position themselves in a turbulent economy.

Banking heavyweights including Goldman Sachs and Morgan Stanley have already announced a string of layoffs this year as part of their cost-cutting spree.

PNC revenue for the three months ended Sept. 30 fell 5.7% to $5.23 billion, missing analysts’ average estimate of $5.32 billion.

Average deposits at PNC fell 3.8% to $422.5 billion, compared with $439.2 billion a year earlier.

The lender posted a profit of $1.57 billion, or $3.60 per share, compared with $1.64 billion, or $3.78 per share a year earlier. Analysts had estimated a profit of $3.11 per share, according to LSEG IBES data.

PNC said its fourth-quarter net interest income (NII) — the difference between what banks earn from lending and pay out on deposits — could drop 1% to 2% from the previous quarter.

Its third-quarter NII fell 1.6% from a year earlier.

Some lenders have been cautioning about a weakness in NII growth as borrowing costs surge, dissuading customers from applying for loans, especially as the central bank keeps rates higher for longer.

PNC set aside $129 million as provisions for credit losses, compared with $241 million last year.

Its banking division said earlier this month that it had purchased a portfolio of capital commitments from Signature Bridge Bank for $16.6 billion in an arrangement with the Federal Deposit Insurance Corp.

(Reporting by Jaiveer Shekhawat and Pritam Biswas in Bengaluru; Editing by Pooja Desai, Sriraj Kalluvila and Vinay Dwivedi)