PNC cuts jobs to bolster tech

PNC Bank is looking to reduce and manage expenses and use the resulting funds to invest in technology. “We are focused on expense management, particularly in the current environment, and have taken actions to maintain discipline expense control,” Chief Executive Bill Demchak said today during the bank’s third-quarter earnings call. “We will use savings from this program to fund investments in key growth markets and technology.” [caption id="attachment_220088" align="alignright" width="300"] Photo by Bloomberg Mercury [/caption] The $558 billion bank has reinvested close to $3.7 billion into its operations in the past decade by managing expenses and is looking to do more, Chief Financial Officer Rob Reilly said. In Q2, PNC upped its 2023 improvement plan savings outlook by $50 million, increasing its cost-reduction efforts to $450 million, up from the previously announced $400 million. “We remain diligent in our expense management efforts, particularly when considering our current revenue environment,” Reilly previously said during the bank's Q2 earnings call. The Pittsburgh-based bank spent $1.7 billion on salaries in Q3, a 2% year-over-year decrease. On Oct. 6, PNC started reducing its workforce by 4% which Reilly said will save PNC $325 million in 2024. The bank had 58,967 employees in Q3 2023, compared to 61,213 in Q3 2022, a 3.6% reduction YoY, according to the bank’s earnings report. THE BIG PICTURE: Banks like Wells Fargo , Ally, and Citibank are also trimming their workforce to reduce costs and remain competitive. Wells Fargo’s headcount dropped to 227,000 employees in Q3, a 5% decrease YoY , compared with 239,000 in Q3 2022. Earlier this month, Ally trimmed its workforce by nearly 5% due to a “challenging macro environment.” Citibank is also looking to reduce its headcount as the bank looks to exit operations from 14 geographies like Indonesia, Taiwan and Mexico. BY THE NUMBERS: In Q3, PNC reported: $6.2 billion in interest income, a 50% increase YoY; $5.2 billion in total revenue, a 5.6% decrease YoY; and Digital retail customer usership remained flat at 78%. FLASHBACK: In July, the bank started automating its payments process for corporate clients through API integrations. The move will allow PNC's business clients to to send payments and transfer money through automated clearing house, wire and real-time payments (RTP) networks without third-party involvement. PNC also started rebuilding its tech stack earlier this year to be more modern and flexible. Rebuilding its tech stack will allow PNC to be a more agile organization and enact quick pivots in its operations if required. FUTURE LOOK: PNC is preparing itself for the forthcoming CFPB open banking regulations and is “in favor” of potential changes the regulation might bring to the industry, Demchak said. “I'm in favor of the notion of open banking, where somehow I can just lift and shift my account from one bank to another because now there's technology to do it,” Demchak said. “I look at what they're doing, and hope it's a step in the right direction on security, and the safety and soundness of customer information, leading to a reduction in fraud across the industry.” BOTTOM LINE: The bank is focused on its “key strategic priorities, including our expansion market efforts and upgrading our digital capabilities” while maintaining its disciplined “expense control” in the coming year as loan growth remains comparatively low in a higher for longer rate environment, Demchak said. [stock_market_widget type="inline" template="generic" assets="PNC" markup="{name} ({symbol}) is trading at {price} ({change_pct})" display_currency_symbol="true" api="yf"]

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PNC cuts jobs to bolster tech

Bank’s non-interest expense decreased 1.06% YoY

Gamification: A way to drive financial wellness and engagement?

Digital bank Zopa raises $95M

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