Lower NII and Fee Income to Hurt PNC Financial's Q1 Earnings

Core Viewpoint - PNC Financial Services Group is expected to report improved revenues and earnings for Q1 2025 compared to the previous year, despite some challenges in lending and expenses [1][15]. Group 1: Earnings and Revenue Expectations - The Zacks Consensus Estimate for Q1 earnings is $3.40, reflecting a year-over-year increase of 1.2% [15]. - The consensus estimate for quarterly revenues is $5.48 billion, indicating a 6.5% increase [15]. - In Q4 2024, PNC's earnings surpassed the Zacks Consensus Estimate, with an average earnings surprise of 9.77% over the last four quarters [2]. Group 2: Net Interest Income and Lending Activity - Net Interest Income (NII) is projected to decrease by 2-3% from $3.5 billion in Q4 2024, with the Zacks Consensus Estimate at $3.45 billion [5]. - Average loans are expected to decline by 1% sequentially, although lending activity showed some improvement due to decent demand for various loan types [4][5]. Group 3: Non-Interest Revenues - Mortgage revenues are anticipated to grow, with the consensus estimate for residential and commercial mortgage revenues at $132.6 million, an 8.7% sequential rise [6]. - Asset management and brokerage income is expected to remain stable, with a consensus estimate of $374.7 million [7]. - Capital markets and advisory income is projected to decline by 11.4%, with a consensus estimate of $308.5 million [8]. Group 4: Expenses and Asset Quality - Non-interest expenses are expected to rise due to investments in technology and digitalization, with management projecting a decrease of 2-3% from $3.5 billion in Q4 2024 [11]. - Provisions for credit losses are expected to increase to $249.9 million, a 60.2% sequential jump, reflecting concerns over potential loan defaults [12]. - The consensus estimate for non-performing assets (NPAs) is $2.38 billion, indicating a 1.1% increase from the previous quarter [13].