PITTSBURGH, June 23, 2022 /PRNewswire/ — PNC Financial Services Group, Inc. (NYSE: PNC) today announced the results of its biannual stress test conducted by the company 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 corporate-run stress tests are designed to help assess whether banking organizations have sufficient capital to absorb losses and sustain operations under very adverse hypothetical economic conditions over a nine-quarter projection period. The projection period for the 2022 test covers January 1, 2022 at March 31, 2024.
“The stress test results demonstrate that PNC is well positioned with a strong balance sheet to meet the needs of our customers, communities and employees during the hypothetical challenges of a severe economic downturn,” said PNC’s President and CEO. William S. Demchak.
In the highly adverse hypothetical scenario provided by the agencies, PNC estimates that its final and minimum regulatory capital ratios would be as follows:
Basel III regulatory capital ratios:
Class 1 common shares
Tier 1 capital based on risk
Total risk-based capital
Level 1 leverage
End of Q1 2024
These results are the product of a forward-looking regulatory exercise using hypothetical macroeconomic assumptions and, as such, these results do not represent a forecast of PNC’s future capital levels or anticipated economic conditions.
The very adverse prudential scenario for the 2022 stress test was released by the Federal Reserve and the OCC on February 10, 2022. The scenario is characterized by a severe global recession accompanied by a period of heightened stress on commercial real estate and corporate debt. markets.
PNC has assumed that its capital stock over the projection period meets the requirements of the Federal Reserve’s current Dodd-Frank Act stress test regulations (12 CFR § 252.56). These assumptions are designed to assist the public in comparing reported results between the bank holding companies tested and to reduce the effect of company-specific assumptions related to capital distributions on reported results. Accordingly, PNC’s financial information and capital ratios for the 2022 stress test are calculated for all nine quarters based on the following assumptions:
- There are no repurchases or redemptions of regulatory capital instruments;
- There is no issuance of ordinary shares or preferred shares;
- No dividends are paid on PNC common stock; and
- Payments on outstanding Tier 1 and Tier 2 regulatory capital instruments are equal to the declared dividend, interest or principal due.
The Basel III risk-based ratios were determined using the standardized approach for risk weights included in the Basel III rules.
The results of PNC’s stress test conducted by the company, including PNC’s estimates of net income before provisioning, other income, loans and other losses, net income before taxes, risk-weighted assets and regulatory capital ratios for PNC, as well as additional information on the methodologies used to perform the stress test are available at www.pnc.com/regulatorydisclosures.
The PNC Financial Services Group, Inc. is one of the largest diversified financial services institutions in the United States, organized around its customers and communities for strong relationships and a local offering of personal and business banking services, including a full range of lending products; specialized services for businesses and government entities, including corporate banking, real estate finance and asset-based lending; wealth management and asset management. For more information about PNC, visit www.pnc.com.
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SOURCE The PNC Financial Services Group, Inc.