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PNC Financial Services Group (NYSE:PNC) stock gained 3% in Monday afternoon trading after Chairman and CEO William S. Demchak expects the bank to post Q3 net interest income at the high end of its 1%-2% growth target announced in July.
“We’d be at the high-end of the guide or even better simply on the outperformance of Harris Williams in capital markets relative to what we had expected,” Demchak said at the Barclays Global Financial Services Conference in New York City.
Asked how the Federal Reserve’s imminent easing cycle would impact PNC’s (PNC) NII outlook, Demchak said “we don’t particularly care what the Fed does in the front-end,” and “we’re largely indifferent to it,” as virtually all its wholesale debt is floating-rate.
The lender’s Q2 results were affected by several significant items. PNC (PNC) monetized half of its Visa class B-1 shares resulting in a gain of $754M. It also adjusted fair value of Visa Class B-2 shares down $116M, and realized a $120M expenses for a contribution to the PNC Foundation. And the company repositioned its available-for-sale securities portfolio, resulting in a loss of $497M.
“The Visa restructuring was only a small part of our actual increase [in NII] last quarter,” Demchak noted in the fireside chat.
