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PNC announces quarterly loss, 5,800 job cuts

PNC Financial Services Group Inc. said yesterday that it would cut 5,800 jobs, or about 10 percent of its staff, following its acquisition of National City Corp. in December.

    by By Ieva M. Augstums, Associated Press, Inquirer
    Published 

PNC Financial Services Group Inc. said yesterday that it would cut 5,800 jobs, or about 10 percent of its staff, following its acquisition of National City Corp. in December.

The Pittsburgh bank also posted a fourth-quarter loss of $248 million, which it blamed on increased credit provisions and costs associated with the National City purchase.

PNC had the fifth-largest share of deposits in the eight-county Philadelphia area, with an 8.2 percent market share as of last June, according to government data.

The company would not say if jobs will be cut at any of its 148 branches and other operations in the Philadelphia area.

"This is an effort to reduce the number of redundant positions resulting from PNC's National City acquisition while maintaining the staff necessary to accommodate anticipated long-term growth. There is little overlap in PNC and National City operations near Philly," said PNC spokesman Fred Solomon.

The job cuts include 4,000 announced by National City in October.

PNC shares fell $2.33, or 7.2 percent, yesterday to $29.85 on the New York Stock Exchange.

The quarterly loss amounted to 77 cents per share and compared with a profit in the 2007 fourth quarter of $178 million, or 52 cents per share.

Excluding merger and integration costs, PNC said it earned $132 million, or 32 cents per share. Analysts polled by Thomson Reuters, on average, forecast earnings of 75 cents per share excluding those costs.

Like most banks, PNC was forced to set aside a growing amount of cash to cover rising loan defaults. PNC's provision for loan and lease losses rose to $3.9 billion during the quarter from $830 million during the same quarter in 2007. The increase was primarily due to a $2.2 billion allowance acquired from National City, of Cleveland.

PNC was the first U.S. bank to use money obtained under the government's $700 billion bailout program to make an acquisition. PNC and National City announced plans for their $5.6 billion deal on Oct. 24, shortly after the program was enacted.