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PNC RELEASES RESULTS OF DODD-FRANK COMPANY-RUN STRESS TEST

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The PNC Financial Services Group, Inc. (NYSE: PNC) announced the results of its biennial company-run stress test on June 23, 2022. This test, adhering to Federal Reserve and OCC regulations, aims to evaluate if PNC has sufficient capital to withstand severe economic downturns over a projected period. The results indicate strong capital ratios, with an ending Common Equity Tier 1 ratio of 9.1% and a minimum of 8.7%. PNC's robust balance sheet positions it well to support its stakeholders during economic challenges, although these results are based on hypothetical scenarios and not forecasts.

Positive
  • Common Equity Tier 1 ratio ending Q1 2024 at 9.1%.
  • Minimum Common Equity Tier 1 ratio of 8.7%, indicating strong capital stability.
Negative
  • None.

PITTSBURGH, June 23, 2022 /PRNewswire/ -- The PNC Financial Services Group, Inc. (NYSE: PNC) announced today the results of its biennial company-run stress test conducted in accordance with regulations of the Board of Governors of the Federal Reserve System (Federal Reserve) and the Office of the Comptroller of the Currency (OCC) under the Dodd-Frank Wall Street Reform and Consumer Protection Act. These company-run stress tests are designed to help assess whether banking organizations have sufficient capital to absorb losses and support operations during hypothetical severely adverse economic conditions over a nine-quarter projection period. The projection period for the 2022 test covers Jan. 1, 2022 to March 31, 2024.

"The results of the stress test demonstrate that PNC is well-positioned with a strong balance sheet to meet the needs of our customers, communities and employees during the hypothetical challenges of a severe economic downturn," said PNC Chairman, President and Chief Executive Officer William S. Demchak.

Under the hypothetical severely adverse scenario provided by the agencies, PNC estimates that its ending and minimum regulatory capital ratios would be as follows:

Basel III Regulatory Capital Ratios:

Common Equity Tier 1               

Tier 1 Risk-Based Capital

Total Risk-Based Capital

Tier 1 Leverage

Supplementary Leverage

Ending Q1 2024

9.1%

10.4%

12.8%

7.2%

6.0%

Minimum

8.7%

10.0%

12.0%

7.2%

6.0%

These results are the product of a forward-looking regulatory exercise using hypothetical macroeconomic assumptions and, as such, these results do not represent a forecast of PNC's future capital levels or anticipated economic conditions. 

The supervisory severely adverse scenario for the 2022 company-run stress test was released by the Federal Reserve and OCC Feb.10, 2022. The scenario is characterized by a severe global recession accompanied by a period of heightened stress in commercial real estate and corporate debt markets.

PNC has assumed that its capital actions during the projection period are consistent with the requirements of the Federal Reserve's current Dodd-Frank Act company-run stress test regulations (12 C.F.R. § 252.56). These assumptions are designed to assist the public in comparing disclosed results across the bank holding companies subject to the tests and reduce the effect of company-specific assumptions related to capital distributions on disclosed results. As a result, PNC's financial information and capital ratios for the 2022 stress test are calculated for the nine quarters based on the following assumptions:

  • There are no repurchases or redemptions of regulatory capital instruments;
  • There are no issuances of common stock or preferred stock;
  • No dividends are paid on PNC's common stock; and
  • Payments on Tier 1 and Tier 2 regulatory capital instruments outstanding are made equal to the stated dividend, interest, or principal due.

The Basel III risk-based ratios were determined using the Standardized Approach for risk weights included in the Basel III rules.

Results of PNC's company-run stress test, including PNC's estimates of pre-provision net revenue, other revenue, loan and other losses, net income before taxes, risk-weighted assets, and regulatory capital ratios for PNC, as well as additional information on the methodologies used in conducting the stress test, may be found at www.pnc.com/regulatorydisclosures.

The PNC Financial Services Group, Inc. is one of the largest diversified financial services institutions in the United States, organized around its customers and communities for strong relationships and local delivery of retail and business banking including a full range of lending products; specialized services for corporations and government entities, including corporate banking, real estate finance and asset-based lending; wealth management and asset management. For information about PNC, visit www.pnc.com.

CONTACTS                                                                   

MEDIA:                                                                      
Marcey Zwiebel                                                           
(412) 762-4550                                                              
media.relations@pnc.com           

INVESTORS:      
Bryan Gill              
(412) 768-4143            
investor.relations@pnc.com

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SOURCE The PNC Financial Services Group, Inc.

FAQ

What were the results of PNC's stress test for 2022?

PNC reported a Common Equity Tier 1 ratio of 9.1% at the end of Q1 2024, with a minimum ratio of 8.7%.

How does PNC's stress test impact investors?

The stress test results indicate PNC's strong capital position, which can assure investors of its stability during economic downturns.

What is the significance of the stress test conducted by PNC?

The stress test assesses whether PNC can absorb losses and continue operations in a severe economic scenario, providing insights into its financial strength.

When was PNC's company-run stress test conducted?

The stress test was announced on June 23, 2022, covering projections from January 1, 2022, to March 31, 2024.

What economic scenario was used in PNC's stress test?

The scenario included a severe global recession and stress in commercial real estate and corporate debt markets.

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