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Dec 31, 2023
PNC Q4 2023 Earnings Report
Reported net income of $0.9 billion and diluted EPS of $1.85, or $3.16 as adjusted, driven by revenue growth, increased average loans and deposits.
Key Takeaways
PNC Financial Services Group reported a mixed Q4 2023, with net income at $0.9 billion, or $1.85 diluted EPS, which included $525 million of post-tax expenses. Adjusted diluted EPS was $3.16. Revenue increased by 2%, driven by strong noninterest income growth. Average loans increased by 2%, and average deposits grew modestly.
Revenue increased 2% due to strong noninterest income growth.
Core noninterest expense increased 5% primarily reflecting higher business activity.
Average loans increased 2%.
Average deposits grew modestly.
PNC
PNC
PNC Revenue by Segment
Revenue by Segment
Retail Banking Revenue
CapyFin.comAsset Management Revenue
CapyFin.com Forward Guidance
PNC anticipates a mild recession starting in mid-2024, with a real GDP contraction of less than 1% lasting into late 2024. The unemployment rate is expected to increase throughout 2024, peaking at close to 5% in early 2025. Inflation is expected to slow with weaker demand, moving back to the Federal Reserve's 2% objective by the second half of 2024.
Positive Outlook
- Economic growth accelerated in the first three quarters of 2023.
- Federal Reserve monetary policy tightening to slow inflation.
- PNC expects the federal funds rate to remain unchanged in the near term, between 5.25% and 5.50% through mid-2024.
- Federal funds rate cuts starting in mid-2024 in response to the recession.
- Inflation will slow with weaker demand, moving back to the Federal Reserve's 2% objective by the second half of 2024.
Challenges Ahead
- Federal Reserve monetary policy tightening to slow inflation is weighing on interest-rate sensitive industries.
- Sectors where interest rates play an outsized role, such as business investment and consumer spending on durable goods, will contract in 2024.
- PNC’s baseline outlook is for a mild recession starting in mid-2024.
- Small contraction in real GDP of less than 1%, lasting into late 2024.
- The unemployment rate will increase throughout 2024, peaking at close to 5% in early 2025.
Revenue & Expenses
Visualization of income flow from segment revenue to net income