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U.S. regional bank PNC Financial Services beat analysts’ estimates for quarterly profit on Friday, but reported a 6 percent rise in operating expenses as it invested in marketing and retail banking.
A strengthening U.S. economy pushed borrowing by businesses higher while keeping loan losses low and interest income rose 5.2 percent to $2.47 billion.
PNC’s total non-interest expense, however, rose 6.2 percent to $2.61 billion in the quarter, a reflection of competition for customers which has led U.S. regional banks to pour cash into online banking and reward schemes.
A number of brokerages had said they expected roughly no change in non-interest expenses and the company’s shares fell 2.4 percent in low volume trading before the bell.
The bank also said it had seen its employee wage bill rise.
Commercial loans for the third quarter increased only modestly to $149.9 billion from $146.9 billion, as rising U.S. interest rates began to feed through to borrowers.
The Pittsburgh, Pennsylvania-based bank said net income attributable to common shareholders rose to $1.32 billion in the quarter ended Sept. 30 from $1.04 billion a year earlier.
Earnings per share rose to $2.82 from $2.16.
Analysts on average had estimated earnings of $2.72 per share, according to I/B/E/S data from Refinitiv.