PNC to shut 200 branches as part of $700 million in cuts
PNC Financial Services Group disclosed plans on Tuesday to close about 200 retail branches this year as part of a plan to reduce expenses by $700 million in a tough operating environment for banks.
PNC spokeswoman Amy Vargo said it is too early to say how many Pittsburgh-area branches and jobs will be eliminated.
PNC has about 2,900 branches in 19 states and 170 branches in Western Pennsylvania. It closed two branches last month — in Freeport and Mt. Lebanon.
The news from PNC follows cost-saving moves by other banking giants in recent months as they try to cope with the challenges of a sluggish economy, the cost of complying with new regulations, and thin profit margins from lending in the low interest-rate economy.
Last week, for example, JPMorgan Chase said it would slash 17,000 jobs by the end of 2014, or 7 percent of its 259,000-person workforce.
The planned closings by PNC were announced by the Pittsburgh bank's president, William Demchak, at a conference for industry analysts in Boston. Demchak was chosen last month to succeed James Rohr as the bank's chief executive in April.
In mid-January, Rohr said PNC's goal is to slash expenses by $700 million this year. The bank closed 65 branches last year. It employs 56,285 people. Banks have been pushing consumers to conduct business online, on mobile phones and at ATM machines.
Demchak, who joined PNC in 2002 as chief financial officer, said PNC doesn't need as many branches because a growing portion of its customers rarely visit them.
“We're serving two demographics today,” those who visit branches and those who don't, he said. “We need both of those customers and have to figure out how to serve both of those customers without alienating either one.”
Transactions at branches cost much more to process than at automated teller machines, on mobile devices or through a telephone banking center. A check deposited via an image sent from a mobile phone costs $3.88 less than a check deposited at a branch, Demchak said.
PNC earned $664 million in the October-December quarter, or 47 percent more than the $451 million it reported in the same period a year ago. However, the bank's earnings for all of 2012 fell 5.5 percent to $2.83 billion from $3 billion a year earlier.
PNC hopes to increase revenue this year by ramping up cross-selling efforts, especially in its wealth-management business and in the Southeast, a market PNC entered last March with the purchase of 400 branches from the Royal Bank of Canada.
Demchak said PNC has “a huge opportunity in a great market” in the Southeast, in terms of adding residential mortgages, asset management customers, and commercial and industrial loans.
Thomas Olson is a staff writer for Trib Total Media. He can be reached at 412-320-7854 or firstname.lastname@example.org.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Energy companies vie for experienced workers with skills in high demand
- Energy-saving tactics pay off in Green Workplace Challenge
- Energy Spotlight: Adam Pope
- Former athletes open businesses
- European Central Bank pledge electrifies stock market; Dow jumps 259 points
- Password change can block hackers from wireless cameras
- Chevron laying off 162 workers from Moon-based unit
- North Dakota oil boom attracts crime
- Bank of New York Mellon 4Q earnings rise to $793 million, but revenue sluggish
- Energy industry says it’s on top of methane leaks, but environmentalists want oversight
- Mylan loses Supreme Court fight over multiple sclerosis drug