PNC Financial sees FY23 revenue growth of 4%-5%, NII up 6%-8%

PNC CFO Rob Reilly said on the company’s Q1 call: "In regard to our view of the overall economy, we are expecting a recession starting in the second half of 2023, resulting in a 1% decline in real GDP. Our rate path assumption includes a 25 basis point increase in the Fed funds rate in May. Following that, we expect the Fed to pause rate actions until early 2024, when we expect a 25 basis point cut. Looking ahead, our outlook for full year 2023 compared to 2022 results is as follows: We expect spot loan growth of 1% to 3%, which equates to average loan growth of 5% to 7%. Total revenue growth to be up 4% to 5%. Inside of that, our expectation is for net interest income to be up 6% to 8%… We expect noninterest income to be stable, expenses to be up 2% to 3%, and we expect our effective tax rate to be approximately 18%. Based on this guidance, we expect we will generate positive operating leverage in 2023. Looking at the second quarter of 2023 compared to the first quarter of 2023, we expect average loans to be stable, net interest income to be down 2% to 4%, fee income to be stable to down 1%. Other noninterest income to be between $200 million and $250 million excluding net securities and Visa activity. Taking all the component pieces, we expect total revenue to decline approximately 3%. We expect total noninterest expense to be up 1% to 2%, and we expect second quarter net charge-offs to be between $200 million and $250 million. Further, given our strong credit metrics, our credit quality is trending better than our expectations."