By Nupur Anand
NEW YORK (Reuters) - PNC Financial Services Group (NYSE:PNC)'s net interest income shrank as it took on increased charges to replenish a government deposit insurance fund as well as workforce reduction expenses.
The bank reported a 44% drop in net income to $0.9 billion.
The Pittsburgh-based lender saw its net interest income (NII) - the difference between what banks earn on loans and pay out on deposits - contract by 8% to $3.4 billion from $3.6 billion in the fourth quarter of last year.
PNC set aside $515 million to replenish the Federal Deposit Insurance Corporation's deposit insurance fund (DIF) and took a hit in its quarterly profit along with several other major banks.
Lenders are required to pay the bulk of the $16 billion needed to replenish the government's coffers which were drained after Silicon Valley Bank and Signature Bank (OTC:SBNY) failed last year.
The bank, which started layoffs in October, also reported $150 million in workforce reduction charges which impacted its bottom line.
It expects full-year net interest income (NII) of $13.91 billion in 2024, down by about 5% from last year.