On Thursday, PNC Financial (NYSE: PNC) reported a higher fourth-quarter profit as it earned more in interest payments and set aside less capital to cover potential loan defaults.
Wall Street CEOs are confident that the incoming U.S. administration would be business-friendly and good for banks. Some of the biggest U.S. banks, including JPMorgan Chase & Co (NYSE: JPM), reported bumper results on Wednesday, while Bank of America (NYSE: BAC) predicted more interest income in 2025.
Banks are also set to benefit from the normalization of deposit costs, which had been elevated over the past 2 years due to competition with rate-sensitive products such as money-market funds.
Pittsburgh, Pennsylvania-based PNC’s net interest income (NII) rose to $3.52 billion in the fourth quarter from $3.40 billion a year earlier, driven by lower funding costs and the continued repricing of fixed-rate assets.
Meanwhile, interest rate cuts are also expected to boost loan demand and deal activity, reduce consumer stress, and enable lenders to lower cash reserves set aside for potential defaults by customers.
PNC’s provisions for credit losses fell to $156 million in the reported quarter, reflecting an improvement in the broader macroeconomic outlook, compared with $232 million a year earlier.
The lender’s net income attributable to diluted common shareholders rose to $1.51 billion, or $3.77 per share, in the three months ended December 31 from $740 million, or $1.85 per share, a year ago.
