PNC Releases Results Of Annual Dodd-Frank Company-Run Stress Test
PITTSBURGH, June 25, 2020 /PRNewswire/ -- The PNC Financial Services Group, Inc. (NYSE: PNC) announced today the results of its biennial company-run stress test conducted 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 company-run stress tests are designed to help assess whether banking organizations have sufficient capital to absorb losses and support operations during hypothetical severely adverse economic conditions over a nine-quarter projection period. "Additionally, the benefit from the recent sale of our equity investment in BlackRock, which bolstered our capital position to record levels, is not reflected in our estimated stress test results. We are confident in our ability to navigate headwinds from a position of financial strength with our strong balance sheet, liquidity and capital flexibility." Nevertheless, the scenario includes a severe global recession that is accompanied by both a period of heightened stress in commercial real estate and corporate debt markets, as well as a sharp drop in asset prices. As required by applicable regulations, capital ratios are calculated (a) for the first quarter of 2020 using the actual capital actions expected to be undertaken in that quarter and (b) for the remaining eight quarters of the stress period, assuming that (i) there are no repurchases or redemptions of regulatory capital instruments; (ii) there are no issuances of common stock or preferred stock (other than equity issuances pursuant to expensed employee compensation programs); (iii) the dollar amount of quarterly common stock dividends is equal to the quarterly average dollar amount of common stock dividends paid during the second, third, and fourth quarters of 2019 and first quarter of 2020 (for PNC, the quarterly average amount of common dividends during this period was $490 million); and (iv) payments on other regulatory capital instruments are made equal to the stated dividend, interest, or principal due.