NEW YORK - PNC Financial the Pittsburgh, Pennsylvania based lender recorded a near record profit of $1.1 billion for the third quarter 2010. The bank was helped by the sale of PNC Global Investment division for $328 million, without this earnings would have been $1.56 a share instead of $2.07. PNC reversed liabilities they had accrued in the second quarter which impacted earnings by $86 million. Restructuring charges resulting from the acquisition of National City Corporation decreased by $10.5 million.
PNC operates its business in six segments, Retail Banking, Corporate Banking, Asset Management Group, Residential Mortgage Banking, Distressed Assets Portfolio and Other including BlackRock.
The Retail Banking division posted a loss of $7 million down from a profit of $80 million in Q2. The results were impacted by the implementation of "Regulation E" which pertains to overdraft charges. In Q4, PNC will incur another charge due to Regulation E which will impact earnings by an extra $32 million. Credit provisions which increased in Q3 are likely to decline in Q4.
The Corporate Banking Segment posted a profit of $427 million compared to $443 million in Q2. The company was hurt by lower revenues as well as a reduction in the value of PNC's mortgage servicing rights which reduced earnings by $72 million. The company had a $48 million benefit for credit losses compared to provisions of $97 million in the second quarter.
The Asset Management Group posted a gain of $44 million in Q3 compared to $28 million in Q2. The group benefited from a release of credit reserves.
Residential Mortgage Banking recorded a profit of $98 million compared to $92 million in Q2.
The Distressed Assets Portfolio recorded a profit of $17 million compared to a loss of $81 million in Q2. The company benefited from a sharp decrease in provisions.
Other including BlackRock, reported a profit of $196 million down from $219 million in Q2. The results were impacted by a reversal of certain accrued liabilities.
In Q4 Allan Edwards the CEO of The Markets Are Open expects PNC to record a profit of $890 million or $1.69 a share.
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