PITTSBURGH, June 21, 2018 /PRNewswire/ -- The PNC
Financial Services Group, Inc. (NYSE: PNC) announced today the
results of its annual 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 financial institutions 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
2018 test covers January 1, 2018 to
March 31, 2020.
The supervisory severely adverse scenario provided by the
Federal Reserve and OCC for the 2018 annual company-run stress test
assumes a severe global recession that is accompanied by both a
period of heightened stress in several markets, including domestic
equity, corporate loan, and commercial real estate markets, as well
as a global aversion to long-term fixed-income assets. 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
2020
6.7%
8.0%
10.6%
7.0%
5.8%
|
Minimum
6.5%
7.9%
10.5%
6.7%
5.6%
|
These results are the product of a forward-looking regulatory
exercise using hypothetical macroeconomic assumptions that are far
more adverse than currently expected by the Federal Reserve or PNC,
and do not represent a forecast of PNC's future capital levels or
anticipated economic conditions.
As required by applicable regulations, capital ratios are
calculated (a) for the first quarter of 2018 using the actual
capital actions expected to be undertaken in that quarter and (b)
for the remaining eight quarters of the stress period, assuming
that (i) there are no repurchases or redemptions of regulatory
capital instruments; (ii) there are no issuances of common stock or
preferred stock (other than equity issuances pursuant to expensed
employee compensation programs); (iii) the dollar amount of
quarterly common stock dividends is equal to the quarterly average
dollar amount of common stock dividends paid during the
second, third, and fourth quarters of 2017 and first quarter of
2018 (for PNC, the quarterly average amount of common dividends
during this period was $338 million);
and (iv) payments on other regulatory capital instruments are made
equal to the stated dividend, interest, or principal due.
The Basel III ratios were determined using the standardized
approach for risk weights included in the Basel III rules.
Results of PNC's annual Dodd-Frank company-run stress test,
including PNC's estimates of pre-provision net revenue, other
revenue, loan and other losses, net income before taxes, 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:
PNC Media Relations
(412) 762-4550
media.relations@pnc.com
INVESTORS:
Bryan
Gill
(412) 768-4143
investor.relations@pnc.com
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SOURCE PNC Financial Services Group, Inc.