(Reuters) – US regional lender PNC Financial Services Group Inc ( PNC.N ) predicted moderate credit growth and a 4% increase in loan loss provisions in the second quarter on Friday.
After PNC had reported largely in line with analyst estimates in the first quarter, CFO Robert Rilley pushed the stocks to a more than three-month low.
The broader market and the S & P 500 Financial Sector Index .PSY were both lower, weighed on by quarterly results from JPMorgan Chase Co ( JPM.N ), Wells Fargo & Co. ( WFC. ) and Citigroup Inc ( CN ).
Chief executive Bill Demchak said he expects real estate markets to tighten following a profit call, leading to slower credit growth in the business.
"The combination of increasing business optimism and lower corporate tax rates has raised the bar on credit growth expectations," said Edward Jones analyst Kyle Sander.
PNC second quarter financial forecast for credit losses between $ 1
The higher provision and a 5 percent increase in expenses offset gains on higher interest income and pushed PNC Financial to report inline earnings for the three months ended March 31.
The Pittsburgh-based bank among the United States The largest local lenders in the US have surpassed analysts' earnings expectations for the last seven quarters.
The company reported earnings per share of $ 2.43, according to the analysts' average estimate, according to Thomson Reuters I / B / E / S.
PNC Financial, which holds a minority stake in BlackRock Inc. ( BLK.N ), said its loan portfolio grew 4 percent in the first quarter, while commercial lending grew 6 percent.
Net interest income increased 9 percent to $ 2.37 billion.
Reporting by Parikshit Mishra in Bengaluru; Arrangement of Sriraj Kallowila