PNC has capacity, but regulatory climate makes major M&A unlikely – CFO

The PNC Financial Services Group Inc. is "fully capable" of another major bank acquisition, but a tougher regulatory stance on mergers is standing in the way, the company's CFO said.

"We don't see that as likely anytime soon, largely due to the regulatory environment, which at the moment isn't real supportive of that," Robert Reilly said at an investor conference June 14.

Reilly said PNC will focus on building on its $11.57 billion acquisition of BBVA USA Bancshares Inc., which he said gives the bank "a multiple-year, maybe 10-year bona fide organic growth path."

He added that PNC remains interested in bolt-on acquisitions, largely in the payments space.

Reilly reaffirmed PNC's financial guidance for the second quarter, which includes a sequential increase of 9% to 11% in revenues. He said the recovery in the bank's merger advisory business it had hoped for has come through during the period.

The CFO added that commercial loan growth has been a little stronger than expected, but that PNC has pulled back on securities purchases in anticipation of higher rates.

Reilly said credit performance remains very strong "and the outlook is good, if not for all these macroeconomic warning signs that has everybody concerned."