The US's best bank 2020: PNC Financial Services


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To succeed, you have to be national: for Bill Demchak, chief executive of PNC Financial Services, it’s the mantra that has guided his strategy since taking over the reins of the firm in 2013.

Seven years on, it’s an approach that has served the group well. The bank is Euromoney’s choice as the US’s best bank.

Demchak joined the bank in 2002 as chief financial officer, before serving in other roles including running its corporate and institutional division (C&I), which is the profit driver for the group, and brings in 35% of revenues.

On taking the top job, he turned his attention to how a firm such as PNC could grow into a powerhouse. The strategy so far had driven good performance but would always be limited in scope.

“We came to the conclusion that what we would end up doing was having a nationwide C&I business, but trying to fund that with a regional retail footprint,” he says. “Well, that’s not going to work long term.”

The only future, he concluded, was to be national in all that it did.

That meant doing more than just pushing into new markets with its C&I division. From now on, the bank would methodically target a couple of metropolitan areas each year and launch the whole bank into them.

Retail branches would underpin it – not a huge network but enough for none to be more than 20 minutes’ drive from anywhere in the area. Demchak calls it a branch-lite approach.


Bill Demchak,
PNC Financial Services

From being present in 12 of the 40 biggest metropolitan statistical areas (MSAs) in the US in 2013, the bank is now in double that.

This year it was set to open in Seattle and Portland – until Covid-19 put that on hold.

The second axis of Demchak’s strategy was to be technology: digital tools for retail and corporates, the bank’s own hybrid cloud, new data centres and technology to support its exclusively onshore call centre.

Today, the heavy lifting of all that upgrading is done – technology investment is now about 60% weighted towards new development.

It’s been a patient build, and Demchak makes no excuses for that. Revenues and profits have risen by about 17% over five years. But last year’s $17.8 billion revenue was a record for the firm, while the 4% increase was better than many peers.

Even today, having just offloaded the bank’s final 22% shareholding in asset manager BlackRock, a $14.4 billion sale in May that means PNC is now able to consider making the leap into the next tier of US banking, Demchak is not rushing into anything.

“We didn’t know – and we still don’t know – the outcome of the Covid-19 crisis,” he says. “But the simple thought was that in times of crisis, opportunities arise out of dislocated markets – and the person with the most capital wins.”

Speaking at a recent event, he said he would consider an acquisition to take the bank over the $700 billion of assets threshold that would see it enter the second-highest category of prudential regulations in the US.

At the end of the first quarter of 2020, PNC was the seventh-biggest bank in the US, with assets of $433 billion. Among the regional banks, only Truist – formed in 2019 by the merger of SunTrust and BB&T – and US Bancorp are bigger.

The bank’s years of technology investment came to the fore when the coronavirus crisis hit. Demchak was shocked into quick action after seeing the panicked looks on the faces of senators in Washington DC in early March, after they had been briefed on the virus. He ordered half his staff home within days.

Not long after, nearly the whole of the 52,400-strong workforce was working remotely. Thousands of them would soon be working on processing applications within the government’s Paycheck Protection Program (PPP) – including Demchak himself.

Years of solid work and the timely monetization of its BlackRock holding mean that PNC now stands on the cusp of a new era, even as crisis swirls through the economy and through society at large. But values still take centre stage: the bank has just announced a $1 billion commitment to help end systemic racism.

For Demchak, it is more important than ever to do the right thing and be seen to be doing it.

“You can’t be long-run successful unless you protect your brand and service your clients,” he says.