COVID-19 Has PNC Back On The Hunt

What a difference a pandemic makes. While PNC Financial’s (PNC) management had spent the better part of a few years now explaining why whole bank M&A no longer made sense as a growth strategy, management decided to sell its sizable stake in BlackRock (BLK) and is now openly discussing its intention to be opportunistic in bank M&A.

Good managers adapt to new circumstances, and I believe that is what PNC is doing here. If management is right about the fed funds rate staying at 0.25% or below for the next three years, there will be more than a few regional banks struggling to generate any meaningful earnings growth, and PNC is likely to have multiple options. How quickly a deal materializes is a key unknown, though, and the absence of BlackRock will be felt in the earnings until the company finds a better use for that capital.

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COVID-19 Has PNC Back On The Hunt