TribLIVE

| Business


 
Larger text Larger text Smaller text Smaller text | Order Photo Reprints

Stress test passed, PNC raises dividend by 10 percent

Email Newsletters

Click here to sign up for one of our email newsletters.

On the Grid

From the shale fields to the cooling towers, Trib Total Media covers the energy industry in Western Pennsylvania and beyond. For the latest news and views on gas, coal, electricity and more, check out On the Grid today.

By Thomas Olson
Thursday, April 4, 2013, 10:30 a.m.
 

As telegraphed by PNC Financial Services Group in mid-March, the bank's board of directors increased its quarterly common stock dividend on Thursday — a result of the bank passing government stress tests.

PNC is raising the dividend to 44 cents a share, up 4 cents per share, or 10 percent, from 40 cents. The new dividend will be paid on May 6 to shareholders as of April 16.

The bank said three weeks ago it might raise its dividend rate when PNC received approval from the Federal Reserve to return more capital to shareholders.

The central bank put PNC and 17 other major U.S. banks through stress tests — the second round since the financial crisis of 2008-09 — to determine how well the biggest banks would survive another deep recession. The scenario included such economic stresses as a 12.1 percent unemployment rate and a 50 percent drop in stock prices.

PNC was paying a 66-cent-a-share quarterly dividend before the crisis, but slashed the rate to 10 cents in April 2009 in order to conserve capital. It remained there until April 2011, when it was bumped back up to 35 cents.

“Today's board actions significantly increase our shareholder return,” said CEO James Rohr. “Our strong capital levels and our financial performance demonstrate PNC's ability to support our clients, invest in our businesses and deliver long-term shareholder value.”

Bank of New York Mellon Corp., which also passed the Fed's stress test, likewise said weeks ago its board might raise the bank's quarterly dividend rate, which stands at 13 cents a share. Meanwhile, the bank will start buying back up to $1.35 billion of common stock by first-quarter 2014.

Thomas Olson is a staff writer for Trib Total Media; 412-320-7854 or tolson@tribweb.com.

Subscribe today! Click here for our subscription offers.

 

 


Show commenting policy

Most-Read Business Headlines

  1. Experts: If health insurers’ safeguard goes broke, consumers could pay
  2. Visa limits vex businesses
  3. Tech sector drives gains on Wall Street
  4. Scented society is killing cheap perfume industry
  5. Kings Family Restaurants sold to California firm
  6. Watch out for fraud, elder abuse
  7. Nike, Under Armour invest in watching exercisers’ steps
  8. Camera prevalence approaches sci-fi realm
  9. Rules could kick door open for nuclear power
  10. Planned Smallman Place condos in Strip District selling fast
  11. Frederick’s seeks bankruptcy after closing lingerie stores