PNC now plans to spend $1.5B as branch expansion doubled
U.S. Bank, Bank of America, JPMorgan also investing in bank branches
PNC Financial Services Group Inc. said it will spend $500 million more than originally planned to double its branch expansion and renovate more of its existing bank locations.
The Pittsburgh-based lender plans to add 100-plus branches in cities including Atlanta, Phoenix and Charlotte and Raleigh, North Carolina, and Miami, Orlando and Tampa, Florida, and renovate 200 additional existing locations. That’s on top of its earlier plans, announced in February, to spend roughly $1 billion on more than 100 new branches in Texas, Florida and Colorado, and renovate more than 1,200 of its 2,200-plus locations across the US.
The cities where PNC is adding branches are “obviously incredibly attractive from a demographic perspective,” Alex Overstrom, head of retail banking for the company, said in an interview. “These cities are expanding and they’re growing at a really rapid pace.”
While online and smartphone banking, as well as ubiquitous ATMs, have cut down on the need for in-person branch visits, industry executives see the value of having a strong bricks-and-mortar presence.
“We still have a significant number of customers who open their accounts in branches,” Overstrom said, adding that PNC also has more digitally focused clients in markets with branches due to increased brand awareness. Furthermore, he said, customers at physical locations often find it easier to discuss home loans, retirement plans and other financial products with bank employees. “You want to have that team, you want to have that conversation.”
In February, the largest US bank, JPMorgan Chase & Co., announced plans to open more than 500 new branches and hire 3,500 workers over the next three years. Rival Bank of America Corp. said last year it would open branches in nine new markets by 2026, including New Orleans, Milwaukee and Boise, Idaho.
PNC last month announced third-quarter results that topped estimates, driven by higher-than-forecast net interest income and non-interest income, along with a loan-loss provision that was lower than analysts had expected.
–By Daniel Taub (Bloomberg News)
