Earnings roundup: Tech-related spend shoots up at PNC, State Street and BNY Mellon

PNC will continue to expand its automation efforts and IT spend in 2022, responding in part to the “Great Resignation,” or the unusually high number of workers quitting their jobs recently. The resignation trend is leading to greater wage pressure for businesses, said PNC Chairman, President and CEO William Demchak during last week’s fourth-quarter earnings call. [caption id="attachment_220977" align="alignright" width="300"] Photo by Bloomberg Mercury[/caption] “Naturally, we'll look to offset these increases with our continuous improvement efforts, which include driving further automation and rethinking core processes,” Demchak said. “We continue to invest in technology to enhance our capabilities.” PNC reported net income of $1.3 billion for Q4, down 12% from the third quarter’s net income of $1.5 billion. The bank reported 2021 net income of $5.7 billion, up 90% from $3 billion in 2020. Revenue was $5.1 billion for Q4, down 1% from $5.2 billion in Q3 but up overall for 2021 at $19.2 billion compared with $16.9 year over year. Expenses were up 6%, which was linked to integration costs of $391 million related to the $11.6 billion acquisition of BBVA . Like most banks, Pittsburgh-based PNC does not break out technology spend. The closest and most likely category would be “equipment,” where the bank spent $437 million during Q4, up $82million from Q3. Zelle transaction volumes were up 50%, Demchak said. Early Warning Services, the network operator of Zelle, is owned by Bank of America, Truist, Capital One, JPMorgan Chase, Wells Fargo, U.S. Bank and PNC. Shares of PNC [NYSE: PNC] were trading at $204.11 as of market close., up 1.57% as of market open. State Street increases information systems and communication spend 7% YOY State Street increased its information systems and communication spend to $1.7 billion in 2021, a 7% YoY increase. It reported Q4 spend of $436 million, a 7% increase from Q3. The spending increase in part reflects the New York bank’s pivot to the cloud, said Eric Aboaf, chief financial officer. “Information systems and communications were up 11% due to continued investment in our technology infrastructure and resiliency as well as equipment expenses, as we move more activities to the cloud,” he said during last week’s Q4 earnings call. Among the tech projects State Street built out in 2021 are its Collateral+ platform for collateral management and its blockchain capabilities . The $315 billion bank intends to leverage its Alpha platform to grow revenue in 2022, Chairman and CEO Ronald O’Hanley said during the call. Alpha is a front-to-back asset-servicing platform for institutional and wealth management firms. The bank reported generally accepted accounting principles (GAAP) Q4 revenues of $3.1 billion, up 5% YoY, and net income of $697 million, up 30% YoY. Total revenue for 2021 was $12 billion, up 3% YoY, and net income for the year was $2.7 billion, up 11% YoY. Shares of State Street [NYSE: STT] were trading at $93.80 as of market close., up 3.09% as of market open. BNY Mellon Q4 software and equipment spend up 6% YOY The Bank of New York Mellon touted its investment in digital assets and real-time payments during its Q4 earnings call last week. Chief Executive Officer Thomas Gibbons said he couldn’t recall another year in which the bank had rolled out as many innovative products and services. “Digital assets, while still early days and recognizing that the regulatory landscapes in the space is still evolving, our investments in building an industry-first integrated digital and traditional assets offering are clearly showing positive initial results following the launch of our digital assets unit at the beginning of last year,” Gibbons said. Among the steps the $444.4 billion bank took in 2021 was to partner with Grayscale Investments to service crypto funds. The bank has contracted with “almost half of the pending funds in the U.S. and serviced most of the crypto funds in Canada,” Gibbons said, adding that he was excited about the revenue and efficiency potential of smart contracts and tokenization. BNY Mellon in late 2021 launched a real-time bill pay solution for billers and their customers; in May, rolled out its real-time e-bills and payments; and in September announced a partnership with Citi and Verizon wherein Verizon could send request-for-payment messages to consumers who bank with Citi using BNY Mellon's real-time e-bills and payments functionality, Gibbons said. “We’ve already onboarded additional clients, and the long list of interested prospects continues to grow,” he said. The bank reported 2021 revenue of $15.9 billion, up 1% YoY. Quarterly revenue was $4 billion, up 5.3% from $3.8 billion in Q4 2020. Net income was $3.8 billion for 2021, up 4% YoY, and $869 million for Q4. Software and equipment spend was $379 million for Q4, up from 6% YoY. Shares of Bank New York Mellon [NYSE: BK] were $58.90 at market close, up 3.01% as of market open. Bank Automation Summit, taking place March 1-2 in Charlotte, N.C., is the first and only event to focus solely on automation in banking. The event will feature the brightest minds from across financial services on intelligent automation strategies and deployment. Learn more and register for Bank Automation Summit 2022 .

Earnings roundup: Tech-related spend shoots up at PNC, State Street and BNY Mellon

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Earnings roundup: Tech-related spend shoots up at PNC, State Street and BNY Mellon

State Street increased information systems and communication spend 7% YOY

Listen: CIBC chooses out-of-the-box functionality

How DeFi can bring accountability to ESG

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