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PNC Plunges 42 Percent On Concern Over Losses
By Linda Shen, Bloomberg
PNC Financial Services Group Inc., the fifth-largest U.S. bank by deposits, fell 42 percent in New York trading on concerns about unrealized losses in its investment portfolio. Standard & Poor’s earlier cut the shares to “hold.”
The stock dropped $15.79, or 42 percent, to $21.75 at 4 p.m. in New York Stock Exchange composite trading, the most since at least July 1980. Pittsburgh-based PNC, which acquired Cleveland-based National City Corp. this month, has lost more than half its market value in 2009.
Shareholders are nervous about losses in PNC’s portfolio after news that unrealized losses in State Street Corp.’s fixed- income investments increased, said RBC Capital Markets analyst Gerard Cassidy in an interview yesterday.
“There’s a concern PNC could experience a greater increase in unrealized losses,” Mr. Cassidy said. “Investors are shooting first and asking questions later.” PNC’s investment portfolio makeup isn’t the same mix as State Street’s, he said.
PNC’s “shares are down sharply this month, as investors flee most bank stocks due to general concerns about oversized loan-loss provisions, securities writedowns and possible dividend cuts,” S&P said yesterday in a statement.
Neel Kashkari, the Treasury Department official who administers the government’s Troubled Asset Relief Program, wrote to PNC, Citigroup Inc. and 18 other banks on Friday seeking figures on business and consumer loans. Lawmakers are pressing banks to use federal aid to make loans in an effort to revive economic growth. Treasury also wanted details on purchases of asset-backed securities, according to documents obtained by Bloomberg News.
The stock dropped $15.79, or 42 percent, to $21.75 at 4 p.m. in New York Stock Exchange composite trading, the most since at least July 1980. Pittsburgh-based PNC, which acquired Cleveland-based National City Corp. this month, has lost more than half its market value in 2009.
Shareholders are nervous about losses in PNC’s portfolio after news that unrealized losses in State Street Corp.’s fixed- income investments increased, said RBC Capital Markets analyst Gerard Cassidy in an interview yesterday.
“There’s a concern PNC could experience a greater increase in unrealized losses,” Mr. Cassidy said. “Investors are shooting first and asking questions later.” PNC’s investment portfolio makeup isn’t the same mix as State Street’s, he said.
PNC’s “shares are down sharply this month, as investors flee most bank stocks due to general concerns about oversized loan-loss provisions, securities writedowns and possible dividend cuts,” S&P said yesterday in a statement.
Neel Kashkari, the Treasury Department official who administers the government’s Troubled Asset Relief Program, wrote to PNC, Citigroup Inc. and 18 other banks on Friday seeking figures on business and consumer loans. Lawmakers are pressing banks to use federal aid to make loans in an effort to revive economic growth. Treasury also wanted details on purchases of asset-backed securities, according to documents obtained by Bloomberg News.
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