Magazine article American Banker

PNC and Comerica Get Asset Management Lift

Magazine article American Banker

PNC and Comerica Get Asset Management Lift

Article excerpt

PNC Financial Services Group Inc. and Comerica Inc. beat the Street's fourth-quarter expectations with help from their asset management businesses.

PNC's BlackRock subsidiary on Thursday reported fourth-quarter earnings of $73 million, up 20% from the previous quarter and 46% from a year earlier.

PNC reported earnings of $355 million for the quarter. Earnings per share at the Pittsburgh banking company were $1.20, topping analysts' average estimate by 8 cents, according to Thomson Financial.

"BlackRock has been strong for a long time. All of our businesses had a good quarter," said PNC chairman and chief executive officer James E. Rohr. "We could have a very good '06 without anything magic happening."

Comerica made $55 million selling its asset management business, Framlington Group Ltd., to Axa Investment Managers in October.

That pretax gain contributed 22 cents to the fourth quarter's earnings per share of $1.25, chief financial officer Elizabeth S. Acton said in a conference call Thursday. Comerica's per-share earnings for the quarter were 6 cents above analysts' estimates.

Earnings at the $54 billion-asset Comerica also got a boost from the Detroit company's sale of potentially bad loans and the release of $23 million of reserves. Chief credit officer Dale Greene said in a conference call that Comerica sells unfunded commitments -- which in the fourth quarter were all auto-related loans -- at a value under par.

Asked by an analyst whether Comerica was trying to sever ties to the auto business, chairman and CEO Ralph W. Babb Jr. was diplomatic.

"Obviously, the automotive industry is going through a lot of change at the moment, and we've been in that business for a very long time and through many cycles in the past, and I think we understand the business very well," he said.

But Mr. Babb noted that Comerica is expanding in Texas and California, and said that over time those operations will reduce its exposure to the auto industry.

"We will continue to support the automotive business," he said. "We have an excellent dealer operation that is very geographically diverse as well as nameplate-diverse. ... It's a very liquid collateral position."

Some analysts focused on Comerica's core earnings per share as a more reliable gauge of its performance in the quarter; others said it made the right move in getting rid of the weak auto loans. …

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