PITTSBURGH, June 28,
2024 /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 2024 test covers Jan. 1, 2024 to March 31,
2026.
"The results of the stress test reflect PNC's continued
financial strength and flexibility," said PNC Chairman and Chief
Executive Officer William S.
Demchak. "Our balance sheet is well-positioned to meet the
needs of our customers—and all of our stakeholders—through the
cycle and across a range of challenging economic conditions,
including the hypothetical stresses of a severe economic
recession."
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
2026
9.1%
10.6%
12.0%
8.7%
7.0%
|
Minimum
8.0%
9.4%
11.3%
7.3%
6.1%
|
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 2024
company-run stress test was released by the Federal Reserve and OCC
Feb.15, 2024. The scenario is characterized by a severe global
recession with heightened stress in both commercial and residential
real estate markets, as well as in 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 2024 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 outstanding Tier 1 and Tier 2 regulatory capital
instruments 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 http://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:
Timothy
Miller
(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.