PNC continued its improvement plan in the first quarter of 2023 as efforts to reduce costs by $400 million this year stay on target.
“This program funds a significant portion of our ongoing business and technology investment,” PNC Chief Financial Officer Rob Reilly said today during the $557 billion bank’s earnings call.
BY THE NUMBERS: PNC reported for Q1:
- Revenue increased 19% year over year to $5.6 billion;
- Equipment expenses grew 6% YoY to $369 million; and
- Net income increased 18% to $1.7 billion.
NOTEWORTHY: Non-interest expenses in Q1 increased 4% YoY to $3.3 billion, according to the bank’s earnings supplement. The increase is related to higher personnel costs, an increase in FDIC assessment rate and investment in technology.
Personnel costs increased 6% YoY to $1.8 million, following a decline in personnel-related expenses in Q4 2022, when the bank announced it was reducing its workforce in preparation for an economic downturn.
FLASHBACK: The bank launched PNC Earned It in February 2022 to address the needs for an earned wage access (EWA) tool, Tom Lang, executive vice president and head of treasury management product and operations, previously told Bank Automation News.
PNC Earned It, launched in collaboration with EWA fintech DailyPay, allows clients access to their paychecks during any point of the payment cycle.
MARKET REACTION: PNC stock was up 0.36% to $121.85 at market close today, compared with $121.41 at market close Thursday.
FUTURE LOOK: The bank expects a recession in the second half of 2023 and is assuming a 25-basis point increase from the Federal Reserve Board in May, Reilly said.
“At this point, visibility remains challenging. And our full year [net interest income] guidance assumes the continuation of the recent intensity on deposit pricing, which has been driven by recent events,” he said.
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