PITTSBURGH, March 5, 2015 /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 from Oct. 1,
2014 to Dec. 31, 2016.
The supervisory severely adverse scenario provided by the
Federal Reserve and OCC for the 2015 annual company-run stress test
assumes a severe recession that begins in the fourth quarter of
2014 followed by a recovery starting in the first quarter of 2016.
This year's test incorporates a transition from Basel I to Basel
III that aligns with the Basel III transition schedule adopted in
July 2013 by the U.S. banking
agencies, while maintaining the Basel I Tier 1 Common ratio
throughout the projection period for consistency and comparability
with prior stress tests. Under the hypothetical severely adverse
scenario provided by the agencies, PNC estimates that as of
Dec. 31, 2016, its capital ratios
would be as follows:
Basel
I:
Tier 1
Common
|
10.7%
|
|
|
Transitional
Basel III:
Common Equity Tier
1
Tier 1 Risk-Based
Capital
Total Risk-Based
Capital
Tier 1
Leverage
|
9.2%
10.6%
13.4%
9.2%
|
Each ratio also represents the minimum quarterly ratio for the
metric over the projection period. 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, all capital ratios were
calculated using PNC's actual capital actions undertaken in the
fourth quarter of 2014 and applying the capital action assumptions
specified by the regulations for the remaining eight quarters.
These assumptions include no issuances or redemptions of regulatory
capital instruments (other than issuances pursuant to expensed
employee compensation programs) and a quarterly common stock
dividend calculated as the quarterly average of the common stock
dividend paid in 2014, or $249
million per quarter for PNC.
The Basel I Tier 1 Common ratio was calculated for all quarters
using the Basel I risk-based capital approach which applied to PNC
through 2013. The Transitional Basel III ratios, which came
into effect for PNC as of Jan. 1,
2014, were determined using the Basel III definitions of,
and deductions from, capital included in the revised capital rules
adopted in July 2013 by the U.S.
banking agencies (the "Basel III rules"), including the
transitional phase-ins provided in those rules for 2014, 2015 and
2016 as appropriate. The Transitional Basel III risk-based
capital ratios for 2014 were determined using the Basel I
risk-weighting framework (with the adjustments required by the
Basel III rules), and for 2015 and 2016 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 on the Investor Relations page of PNC's
corporate website at www.pnc.com/regulatorydisclosures.
The PNC Financial Services Group, Inc. (www.pnc.com) is one of
the United States' largest
diversified financial services organizations providing retail and
business banking; residential mortgage banking; specialized
services for corporations and government entities, including
corporate banking, real estate finance and asset-based lending;
wealth management and asset management.
CONTACTS:
MEDIA:
Fred Solomon
(412)762-4550
corporate.communications@pnc.com
INVESTORS:
William H. Callihan
(412) 762-8257
investor.relations@pnc.com
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SOURCE The PNC Financial Services Group, Inc.