PNC is planning to increase spending for its technology development program this year after reducing noninterest expenses through workforce cuts in the fourth quarter of 2022 in preparation for an economic downturn.  

WHY IT MATTERS: Personnel-related expenses were down 5% year over year to $1.9 billion in Q4 but were up 8% sequentially, driven by costs in areas of “variable compensation related to increased business activity,” PNC Chief Financial Officer Rob Reilly said today during the bank’s Q4 earnings call.

The $557 billion bank increased its equipment spend by 7% sequentially to $369 million, as PNC acquired facilities such as buildings for its growth needs moving forward, Reilly added. 

THE BIG PICTURE: Pittsburgh-based PNC achieved its Q2 goal of cutting costs by the end of last year. 

“We had a 2022 goal of $300 million in cost savings through our continuous improvement program, and we exceeded that goal,” Reilly said during today’s call. 

BY THE NUMBERS: PNC reported for Q4: 

• Total noninterest expenses fell 8% YoY to $3.4 billion; and 
• Net income dipped 6% YoY to $1.5 billion; 

FLASHBACK: Having merged with BBVA in October 2021, PNC continues to expand into new geographic areas with greater customer reach, Chief Executive Bill Demchak said during today’s call, noting that “progress within the BBVA-influenced markets continues to exceed expectations.” 

The bank also acquired point-of-sale and payments solution firm Linga during Q3 to expand its digital resources to help clients “keep up with ever-changing consumer expectations,” Emma Loftus, executive vice president and head of PNC Treasury Management, previously said. 

FUTURE LOOK: PNC aims to continue increasing its technology investments this year despite a potential economic downturn and personnel cuts, according to Reilly. 

“Looking forward to 2023, we will be increasing our annual [technology development program] goal to $400 million,” he said. “This program funds a significant portion of our ongoing business and technology investments.”  

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