Charges hit banks' profits
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One-time charges resulted in significant declines in second quarter profits at PNC Financial Services Group and Bank of New York Mellon.
PNC, the region's largest bank, reported net income of $526 million, or 98 cents per share, vs. earnings of $888 million, or $1.67 per share, in the year-ago quarter. Revenue rose 1 percent to $3.6 billion.
Charges for repurchasing faulty mortgages reduced earnings by $284 million, or 54 cents per share. Additional charges for repurchasing securities and integrating Raleigh, N.C.-based RBC Bank shaved another $119 million, or 22 cents per share, from the results.
Chairman and CEO James E. Rohr told analysts that excluding the one-time items, it was a pretty good quarter.
"The majority of our markets are above plan for the first six months and our southeastern acquisition is performing well and above our expectations," Mr. Rohr said during a conference call.
PNC acquired about 400 RBC Bank branches in the Southeast from Royal Bank of Canada in March for $3.5 billion.
A one-time charge to settle a federal class action lawsuit over a failed investment dented BNY Mellon's second quarter profits.
The New York bank reported net income of $466 million, or 39 cents per share, vs earnings of $735 million, or 59 cents per share, in the year ago quarter. The cost of settling the lawsuit reduced earnings by $212 million, or 18 cents per share.
Revenue fell 6 percent to $3.6 billion.
During a conference call with analysts, Chairman, President and CEO Gerald L. Hassell discounted the possibility of the bank engaging in mergers or acquisitions.
"We think we really have enough opportunities internally to really generate better returns for our shareholders," he said.
First Published July 19, 2012 12:10 am