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Financial Results

PNC Reports Second Quarter 2020 Net Income Of $3.7 Billion

PNC net income 2Q20

Sale of Equity Investment in BlackRock, Inc.

  • PNC divested its 22.4% equity investment in BlackRock in May 2020 primarily through the sale of 31.6 million shares in a registered offering and 2.65 million shares repurchased by BlackRock. PNC also contributed .5 million BlackRock shares to the PNC Foundation. Net proceeds from the sale were $14.2 billion. The after-tax gain on the sale of $4.3 billion, and donation expense and BlackRock’s historical results, are reported in PNC’s consolidated financial statements as discontinued operations.

Income Statement Highlights – Continuing Operations

Second quarter 2020 compared with first quarter 2020

  • Results from continuing operations reflected a loss of $744 million, a decrease of $1.5 billion due to a higher provision for credit losses.
  • Provision for credit losses increased to $2.5 billion for the second quarter compared with $914 million for the first quarter due to the significant estimated economic impact of the pandemic. Provision was calculated under the Current Expected Credit Loss (CECL) accounting standard adopted January 1, 2020.
    • Provision was $1.7 billion for the commercial portfolio and $720 million for the consumer portfolio.
  • Total revenue of $4.1 billion declined $260 million, or 6%.
  • Net interest income of $2.5 billion increased $16 million, or 1%, as lower rates on deposits and borrowings and higher average loans, balances held with the Federal Reserve Bank and securities were partially offset by lower yields on earning assets.
    • Net interest margin decreased 32 basis points to 2.52% reflecting the full quarter impact of the 1.5 percentage point reduction in the federal funds rate by the Federal Reserve in March 2020.
  • Noninterest income of $1.6 billion decreased $276 million, or 15%.
    • Fee income of $1.3 billion declined $204 million, or 14%. Service charges on deposits and consumer service fees decreased $136 million reflecting lower consumer spending and fees waived to assist customers in the pandemic, and residential mortgage revenue decreased $52 million due to a lower benefit from residential mortgage servicing rights valuation, net of economic hedge.
    • Other noninterest income of $271 million declined $72 million primarily due to lower net securities gains partially offset by higher capital markets-related revenue.
  • Noninterest expense of $2.5 billion decreased $28 million, or 1%, reflecting lower business activity related to the economic impact of the pandemic and well-controlled expenses.
  • The effective tax rate was 17.5% for the second quarter and 13.7% for the first quarter.

Balance Sheet Highlights

  • Average loans increased $24.5 billion, or 10%, to $268.1 billion in the second quarter compared with the first quarter.
    • Average commercial loans of $189.3 billion increased $25.2 billion, or 15%, reflecting Paycheck Protection Program (PPP) lending under the CARES Act and higher utilization of loan commitments driven by the economic impact of the pandemic on customer liquidity preferences.
    • Average consumer loans of $78.8 billion decreased $.7 billion, or 1%, primarily due to lower credit card, auto and student loans partially offset by higher residential mortgage loans.
  • Loans at June 30, 2020 declined $6.4 billion, or 2%, to $258.2 billion compared with March 31, 2020.
    • Commercial loans decreased $4.5 billion, or 2%. PNC funded $13.7 billion of PPP loans during the second quarter. New loans were more than offset by paydowns of March 2020 draws on loan commitments.
    • Consumer loans decreased $1.9 billion, or 2%, primarily in auto, credit card and home equity loans.
  • Credit quality performance:
    • Overall delinquencies of $1.3 billion at June 30, 2020 decreased $173 million, or 12%, compared with March 31, 2020 due to lower consumer loan and commercial loan delinquencies reflecting CARES Act and other forbearance.
    • Nonperforming assets of $2.0 billion at June 30, 2020 increased $200 million, or 11%, compared with March 31, 2020.
    • Net loan charge-offs were $236 million for the second quarter compared with $212 million for the first quarter.
    • The allowance for credit losses to total loans was 2.55% at June 30, 2020 and 1.66% at March 31, 2020.
  • Average deposits increased $45.5 billion, or 16%, to $335.2 billion in the second quarter compared with the first quarter due to growth in commercial deposits reflecting pandemic-related accumulation of liquidity by customers. Consumer deposits also increased driven by government stimulus payments and lower consumer spending.
    • Deposits at June 30, 2020 increased $40.8 billion, or 13%, to $346.0 billion compared with March 31, 2020.
  • Average investment securities increased $4.0 billion, or 5%, to $88.4 billion in the second quarter compared with the first quarter.
    • Investment securities at June 30, 2020 increased $8.0 billion, or 9%, to $98.5 billion compared with March 31, 2020.
  • Average balances held with the Federal Reserve Bank of $34.2 billion for the second quarter increased $16.9 billion compared with the first quarter, and balances at June 30, 2020 of $50.0 billion increased $30.4 billion compared with March 31, 2020, reflecting higher liquidity from deposit growth and proceeds from the sale of the equity investment in BlackRock.
  • PNC maintained strong capital and liquidity positions.
    • The PNC board of directors declared a quarterly cash dividend on common stock payable on August 5, 2020 of $1.15 per share, consistent with the second quarter dividend paid on May 5, 2020.
    • PNC announced on March 16, 2020 a temporary suspension of its common stock repurchase program in conjunction with the Federal Reserve’s effort to support the U.S. economy during the pandemic, and will continue the suspension through the third quarter of 2020, with the exception of permissible share repurchases to offset the effects of employee benefit plan-related issuances.
    • The Basel III common equity Tier 1 capital ratio was an estimated 11.3 percent at June 30, 2020 and 9.4 percent at March 31, 2020.
    • The Liquidity Coverage Ratio at June 30, 2020 for both PNC and PNC Bank, N.A. exceeded the regulatory minimum requirement.
Categories
NEWS

China’s Shenzhen Introduced the Most Stringent Home Purchase Policy

Shenzhen

Shenzhen, in southeastern China, is a modern metropolis that links Hong Kong to China’s mainland. Shenzhen is home to multiple Chinese tech heavyweights, including Tencent, Huawei and DJI.

Today, the city government said in a statement that only people who have lived in the city with residency permits and made tax or social security contributions for three years are eligible to buy homes there.

The new policy it sent a signal that the government will tame excessive home price rises and prevent speculation.

Shenzhen Introduced the Home Purchase limits(Chinese Version)
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Financing and M&A

Terumo Acquires Quirem Medical

Terumo Corporation (TSE: 4543) today announced it has completed the acquisition of Quirem Medical B.V., a Netherlands-based healthcare startup specializing in the development of next-generation microspheres for Selective Internal Radiation Therapy (SIRT), a treatment for liver tumors. Under the terms of the agreement, Terumo acquired 80.1% of the shares of Quirem Medical. This is over and above its current share position of 19.9%, making Quirem Medical now a wholly owned subsidiary of Terumo.

Terumo will make a one-time, up-front payment of USD 20 million with up to USD 25 million additional payments based on the achievement of future milestones by 2030. It will be funded through cash on hand and will not significantly impact the company’s financial projections for the current fiscal year ending March 31, 2021.

Quirem Medical has developed and manufactures QuiremSpheres™, the only commercially available microspheres containing the radioactive isotope Holmium-166. Recent trials have shown the safety and efficacy of holmium microspheres for the treatment of unresectable liver cancer. To improve patient selection, therapy planning and treatment verification, QuiremSpheres can be visualized and quantified even in low concentrations by means of Single-Photon Emission Computed Tomography (SPECT) and Magnetic Resonance Imaging (MRI). This is unique and cannot be done with currently available Yttrium-90 based microspheres.

Furthermore, Quirem Medical also produces QuiremScout™, a low dose holmium microsphere that helps evaluate the biodistribution of microspheres prior to therapy, and a dosimetry software package, Q-Suite™, which is used to plan QuiremSpheres treatments based on QuiremScout dose imaging. Q-Suite is also able to determine SIRT success immediately after the procedure by converting SPECT and MR imaging into absorbed dose distributions. Together, these three integrated products (QuiremSpheres, QuiremScout and Q-Suite) make up the full Holmium SIRT Platform. The Holmium Platform equips physicians with the necessary tools to optimize SIRT outcomes through more personalized treatment, addressing the individual needs of each patient.

QuiremSpheres, QuiremScout and Q-Suite are CE-Marked and currently available in Europe, the Middle East and Africa (EMEA). In the coming years, Terumo intends to launch the Holmium Platform globally as part of the ongoing expansion of its interventional oncology (IO) portfolio.

Categories
NEWS

Omantel Selects Ericsson for 5G Network Expansion

  • Ericsson to support Omantel in ongoing 5G deployment in key locations across Oman
  • Ericsson to provide Advanced Antenna Systems and 5G New Radio as part of multi-year contract
  • Ericsson 5G radio access network (RAN) technology to serve key areas in Oman

KISTA, Sweden — Omantel has selected Ericsson (NASDAQ: ERIC) to support the Sultanate’s ongoing 5G radio access network (RAN) deployment plans in a multi-year partnership.

Hardware and software products and solutions from the Ericsson Radio System portfolio, including Advanced Antenna Systems and 3GPP standards-based 5G New Radio (NR), will be deployed in Omantel’s network. Ericsson will support Omantel’s commercial 5G deployment at key locations across Oman, including Salalah, Nizwa and Sur.

Ericsson technology will enable Omantel to expand coverage while simultaneously providing a network fit for the future. Ericsson’s high-speed and low-latency 5G technology will allow Omantel to meet growing data traffic demands and deliver high-quality fixed wireless access, as well as enhanced mobile broadband experiences. Subscribers will be able to enjoy speeds of more than 1Gbps and low latency in user experiences such as streaming, downloading, gaming, infotainment and interactivity.

The technology will also enable significant benefits to industry and enterprise in Oman. Omantel will be able to explore and build new business models and use cases, including Internet of Things (IoT) applications.

Eng. Samy Ahmed Al Ghassany, Chief Operating Officer, Omantel, says: “We are constantly working to enhance the digital lives of people, enterprises and industries in Oman through the latest technology available. The deployment of 5G will enable Oman to be at the forefront of digitalization, helping us transform both industry and infrastructure and turn the next generation of possibilities into reality. We value our long-standing relationship with Ericsson and their engagement during the 5G trials over the last three years. We are looking forward to further cooperation in the 5G era.”

Categories
NEWS

Cancer patients face double jeopardy with COVID-19

New survey reveals cancer care disruption in Canada has triggered another public health crisis

The results of a new survey released today by the Canadian Cancer Survivor Network (CCSN) reveal that the disruption of cancer care due to COVID-19 has triggered another public health crisis. In fact, more than half (54%) of Canadian cancer patients, caregivers and those awaiting confirmation of a cancer diagnosis report having had appointments, tests and treatment postponed and cancelled, causing heightened fears and anxiety – even as some pandemic restrictions are lifted. The survey results confirm that safe and timely access to essential cancer care, including diagnostics, testing and treatment, must remain a top priority across Canada during any public health crisis.

Disruption of cancer care causes major physical and psychological impacts

Most affected by the disruption in cancer care during the pandemic are those awaiting confirmation of a diagnosis and recently diagnosed patients (74% and 73% respectively), who are at a critical time in their cancer journey. And while many of those who contacted their doctors (83%) said they were able to have a virtual consult during the height of the COVID-19 pandemic, almost three-quarters (71%) of all surveyed remained concerned about access to in-person care, including being cared for in a hospital/emergency room and receiving various tests and treatment.

In addition to the physical impact of COVID-19 on those facing cancer, the disruption of care has taken a considerable mental and emotional toll, with the majority of respondents surveyed (74%) saying that delays in appointments and treatment have had a major impact on their mental and emotional health. Even as pandemic restrictions begin to lift, ongoing concerns about receiving adequate cancer care continue to fuel anxieties, especially among those with metastatic disease (67%) and caregivers (91%).

Crisis and pandemic planning must include essential cancer care

Based on these survey results, CCSN calls upon governments across Canada to heed the experiences of those facing cancer and their caregivers by providing for the explicit inclusion of essential cancer care in all crisis and pandemic planning.

About the COVID-19 & Cancer Care Disruption in Canada Survey

To assess the extent to which COVID-19 has disrupted cancer care in Canada, a national web survey was conducted by Leger on behalf of CCSN among 1,243 people (960 cancer patients, 206 caregivers of cancer patients and 77 patients in cancer pre-diagnosis) from May 22 to June 10, 2020, using Leger’s online panel, LEO, and with participation from the broader cancer community.

For comparison, a probability sample of the same size would yield a margin of error of +/-3.2%, 19 times out of 20 for patients, +/-6.8%, 19 times out of 20 for caregivers, and +/-11.2%, 19 times out of 20 for patients in cancer pre-diagnosis.

Categories
NEWS

Competition Bureau resolves concerns related to Elanco’s acquisition of Bayer Animal Health

The Competition Bureau announced today that it has entered into a consent agreement with Elanco Animal Health Incorporated (Elanco) to address concerns related to the company’s proposed acquisition of Bayer Animal Health (BAH). Elanco has also committed to forego acquiring Bayer AG’s (Bayer) Canadian distribution rights to several poultry insecticides.

Following an extensive review, the Bureau concluded that Elanco and BAH are each other’s closest competitors in several Canadian markets, that there are few remaining effective competitors in these markets and that the proposed transaction would have resulted in a substantial lessening of competition. The relevant markets include those for low dose canine otitis treatments, feline dewormers with tapeworm coverage and poultry insecticides with darkling beetle coverage.

To remedy the Bureau’s concerns, the consent agreement requires Elanco to divest its canine otitis product, Osurnia, as well as BAH’s feline dewormer, Profender. The consent agreement also notes Elanco’s commitment to forego acquiring the Canadian distribution rights to Bayer’s Tempo, Credo, QuickBayt and Annihilator Polyzone poultry insecticides. Rather, Bayer’s CropScience division will retain these distribution rights. The consent agreement also prevents Elanco, without the Bureau’s approval, from acquiring Bayer’s retained poultry insecticides with darkling beetle coverage for a period of 10 years and from acquiring a significant interest in any poultry insecticides with darkling beetle coverage for a period of 2 years without providing advance notice to the Bureau and waiting a prescribed period of time to complete the acquisition.  

The Bureau is satisfied that this agreement, including Elanco’s commitments related to poultry insecticides, will address its competition concerns in Canada. For more information on the Bureau’s review, consult our comprehensive position statement.

Quote
“Animal health products play a critical role in pet care and in the agri-food sector across the country. The agreement concluded today supports our commitment to take action on matters that are important to Canadians, as it will safeguard competitive prices and product choice for consumers and business owners.”

Matthew Boswell
Commissioner of Competition

Quick Facts

  • Elanco and Bayer notified the Bureau of the agreement regarding BAH on November 22, 2019. The proposed transaction is valued at approximately CAD$10.3 billion.
  • Under the agreement, the Bureau has approved Dechra Limited and Dechra Veterinary Products LLC as acceptable buyers of Osurnia.
  • The Bureau worked closely with the U.S. Federal Trade Commission, the European Commission and the Australian Competition and Consumer Commission throughout its review of the transaction.
  • Bayer Animal Health is a business unit of Bayer AG.
Categories
NEWS

The mask’s external surface deactivates 99% of the Coronavirus suspension within minutes

University of Toronto Tests Confirm First Mask That Deactivates Coronavirus

A study published in the American Journal of Infection Control established that people touch their face 23 times per hour on average1. Furthermore, the coronavirus that causes Covid-19 remains present and infectious on the outer layer of masks for up to 7 days, according to a study published in The Lancet Microbe2. In addition to the warnings issued by governmental authorities pertaining to self-contamination by touching one’s mask, these two scientific publications further demonstrate the major deficiency in the level of protection for all wearers of current masks.

“The TrioMed Active Mask is the first and only respiratory protection that is scientifically proven to deactivate the virus causing Covid-19, therefore drastically reducing the risk of contamination for the wearer”, says Pierre Jean Messier, founder and CEO of i3 Biomedical Inc. “Our company spent years and millions of dollars to develop this interactive antimicrobial technology. The resulting products are used by the medical community around the world and have been tested by independent laboratories to kill numerous microbes, such as MRSA, VRE, E-Coli, Staphylococcus Aureus, Influenza Virus and now SARS-CoV-2. This third-party scientific testing confirms TrioMed’s leading position in medical antimicrobial technology available in the global fight against Covid-19.”

Features and benefits of the TrioMed Active mask include:

  • Active antimicrobial protection of the mask outer layer deactivates >99% of the Coronavirus SARS 2 and Influenza virus H1N1
  • Viral filtration efficiency (VFE) > 99.9%
  • Bacterial filtration efficiency (BFE) > 99.9%
  • Meets ASTM F2100 Level 3
  • Meets European Medical Device standard EN 14683 Type IIR
  • Five-year shelf life
Categories
appointment NEWS

Jefferies Appoints Matthew Larson as Its Chief Financial Officer

Matthew Larson

Jefferies Group LLC (“Jefferies Group”) announced today that, effective August 24, 2020, Matthew Larson will become Jefferies Group’s Chief Financial Officer, succeeding Teresa Gendron, who has been Jefferies Group’s Interim Financial Officer since the untimely illness and death of its former CFO, Peg Broadbent.

Mr. Larson is currently the Chief Financial Officer of Barclays Americas, as well as CFO of Barclays PLC’s Global Markets business. Previously, Mr. Larson was a Managing Director at Goldman Sachs where he held several roles in the Finance Division. Mr. Larson, a Certified Public Accountant, graduated from Idaho State University, where he obtained a Bachelor of Science in Finance.

Rich Handler, Chief Executive Officer of Jefferies Group, and Brian Friedman, Chairman of the Executive Committee of Jefferies, stated: “We are very pleased that Matt will soon become Jefferies Group’s CFO. Matt’s experience and skills make him well qualified to be our CFO and to oversee our corporate support functions. We want to thank Teri for the tremendous support she has given Jefferies Group as its interim CFO. We look forward to Teri and Matt working closely together as the respective CFOs of Jefferies Financial Group Inc. and Jefferies Group.”

Jefferies Group LLC is the largest independent, global, full-service investment banking firm headquartered in the U.S. Focused on serving clients for nearly 60 years, Jefferies is a leader in providing insight, expertise and execution to investors, companies and governments. Our firm provides a full range of investment banking, advisory, sales and trading, research and wealth management services across all products in the Americas, Europe and Asia. Jefferies Group LLC is a wholly owned subsidiary of Jefferies Financial Group Inc. (NYSE: JEF), a diversified financial services company.

Categories
NEWS

The first Global Sources Online Show kicks off on July 29

The first Global Sources Online Show kicks off on July 29

Global Sources announced that the first Global Sources Online Show (“GSOS”) is scheduled to be held from July 29 to August 9, allowing more than two million online and tradeshow buyers worldwide to source from around 900 premium and verified suppliers with around-the-clock service for two consecutive weeks.

Traditional sourcing has been halted by lockdowns and travel restrictions around the globe. In response to the new sourcing situation, Global Sources is moving its offline sourcing experience online, in the form of its first ever GSOS. The show offers 24/7 sourcing regardless of geographic boundaries and time difference, using state-of-the-art technology to bring the best suppliers to international buyers who are unable to travel, providing real-time interaction and in-demand products across three specialized show phases.

“Global Sources is drawing on its proven trade shows and online sourcing expertise built in the last 50 years to bring buyers real-time communication with top suppliers and the latest market insights, focusing on the product categories in highest demand amid the new priorities of the COVID-19 pandemic,” said Hu Wei, CEO of Global Sources. “We are creating a unique online sourcing experience for buyers and suppliers from all over the world supported by our buyer community, verified suppliers, evolving online platform and trade show expertise.”

GSOS is set to feature three high-demand product categories with respective themes, including Medical & HealthcareStudy & Work From Home, and Home & Hardware. About 900 verified suppliers are expected to showcase their in-demand products which are carefully selected based on buyers’ current sourcing needs.

GSOS brings new sourcing experience:

  • Featured product pavilions to allow buyers to quickly browse products of a specific category
  • Customized product videos to attract buyers’ attention
  • Online inquiry and quotation, one-on-one online meetings to follow up on buyers’ sourcing needs.
  • Private Sourcing Events to meet with target buyers
  • Online chat to communicate and build trust with buyers
  • Virtual meeting rooms to build business relationships in a private environment
  • Online summits and conferences, featuring panel discussions and case studies to enable buyers to capture the latest trends and network with sourcing experts
  • Supplier live streaming led by professional hosts, featuring suppliers’ exclusive designs as well as factory or showroom tours to provide buyers with an intuitive sourcing experience
  • Entertainment segments including live performances tailored for the online show audience

For registration and more details on GSOS, please visit https://www.gsos.com/?utm_source=Preshow_Release&utm_medium=PR_PressRelease&utm_campaign=GSOS_PR_HK20&WT.mc_id=8021415  

Global Sources Online is a professional B2B trade platform with in-depth industry specialization. With two million users, it has become the preferred sourcing platform for high-end buyers worldwide. An internationally media company and exhibition organizer based in Hong Kong for nearly 50 years, Global Sources organizes world-class sourcing events, including the world’s largest electronics sourcing shows, serving tens of millions of buyers and suppliers, and is committed to promoting global trade.

Categories
appointment

Leica Camera appoints Mike Giannattasio as President of its North American division

Mike Giannattasio

In this position, Giannattasio will bring his extensive knowledge in brand strategy, organizational development, sales growth, and marketing transformation to Leica Camera USA. Giannattasio will replace longstanding President Roger Horn, whose immeasurable legacy will be carried forth by his successor.

Mike Giannattasio joins Leica with over 30 years’ experience in the luxury accessory sectors at Montblanc North America, Christian Dior Watches, Breguet, and Swatch Group. Before joining Leica, Giannattasio held the position of President of Silhouette International, a pioneer in the professional eyewear and lens industry. Matthias Harsch, CEO of Leica Camera AG says, “Mike’s background will bring a new layer of expertise and experience to our leadership team here at Leica. We look forward to his impact on our brand and distribution strategy in the ever-changing optical industry, and how he envisions Leica’s growth as a leader in the space.”  

Roger Horn will be retiring after over 40 years of dedication and service, handing over the reins to Mike Giannattasio, who brings with him vast leadership experience in the luxury sector.