PNC, BAC, CFG, JPM, MTB...Deutsche Bank Sees PNC As Biggest Winner From Fed's Rate Hike

PNC Financial Services Group Inc

was viewed as the biggest winner from the Federal Reserve's rate hike by Deutsche Bank on Wednesday. Deutsche Bank released its industry report indicating that analysts expect the largest bank increase at PNC (+10bps, ex purchase acct accretion drag). The analysts also view increases at Bank of America Corp

, Citizens Financial Group Inc

, JPMorgan Chase & Co.

, and M&T Bank Corporation

. The first hike may not necessarily drive most bank NIMs higher in 1Q16. Given that the curve has flattened, some banks are more levered to rising medium/long term rates vs. short rates and underlying NIM pressure continues, Deutsche Bank analysts commented. According to the industry report, PNC's management recently had noted that its 25bp rate rise in December is expected to boost its 1Q15 net interest income by $85m (worth 10bps to NIM) as many assets reprice immediately, while few liabilities do. PNC's net II/NIM benefit to FY 2016 is in the range of $150-200m. Earlier in December, PNC Financial Services Group CEO William Demchak said "PNC is expecting "moderate growth" in the economy, "not wildly different than what we had this year," during a webcast from New York. PNC Financial Services Group was at a price of 97 Wednesday, marking a change of 2.28 percent. The company is forecasting an earnings per share growth of -0.80 percent over the next year.