For PNC Financial, the US’s inaugural best super-regional bank, 2021 was a landmark year in a decade-long national expansion under chief executive Bill Demchak.
In early June last year, the bank completed its acquisition of BBVA USA, after receiving regulatory approval in May. The acquisition made it the country’s fifth-largest commercial bank, accelerating its national expansion and taking total assets to $560 billion. It moved to convert BBVA’s systems and branches later in the year.
The Pittsburgh-based bank also continued its national expansion by opening organically in Arizona, Nevada and key areas of southern California, including Orange County and Los Angeles. This took PNC’s presence to all 30 of the country’s main population hubs. This was up from only 12 of the top 40 hubs in 2013, when Demchak became chief executive.
It was a record year in terms of revenue, with the bank posting a 13.7% increase to $19.2 billion, despite the low interest rate environment that prevailed during the year. Total loans increased to $288 billion at the end of 2021, up from $242 billion at the end of 2020. Despite one-off costs associated with the BBVA USA deal, return on equity stood at a 10.8%, with a return on assets of 1% and the proportion of non-interest to interest income at 45%.
PNC returned $3 billion to shareholders in 2021, comprised of $2 billion in common stock dividends and $1 billion in share repurchases, helping it beat its peer group in terms of annualized total returns over the past five years.
In the first quarter of 2022, the loan book inched up some more and net income rose by 9% to $1.4 billion, thanks in part to a fall in expenses of 16% – or 7% excluding previous integration costs.
The acquisition of BBVA USA made it the country’s fifth-largest commercial bank, accelerating its national expansion and taking total assets to $560 billion
Meanwhile, PNC has also been increasing its technology investments and capabilities in the face of growing non-bank rivals. One sign of this was its launch of Low Cash Mode in 2021, helping its Virtual Wallet customers avoid overdraft fees. The scheme reduced overdraft fees and complaints by half.
It also integrated with the Akoya Data Access Network, allowing customers to share data with fintechs and data aggregators with improved security. PNC also acquired payments processing company Tempus Technologies.
