PNC Financial Services Group has reported a 4% decline in its third-quarter net profit, primarily due to a decrease in interest income and an increase in provisions for potential credit losses. The Pittsburgh-based bank's net income fell to $1.51 billion, or $3.49 per share, from $1.57 billion, or $3.60 per share, in the same period last year. This decline comes as the bank's net interest income dropped slightly to $3.41 billion from $3.42 billion a year earlier, reflecting the broader trend in the banking sector as the Federal Reserve continues to cut benchmark rates.

Despite the drop in profit, PNC Financial reported an increase in overall revenue, which rose to $5.43 billion from $5.23 billion, surpassing analyst expectations. This growth was driven by a 10% increase in fee income, which reached $2 billion, and a 3% rise in net interest income due to higher yields from interest-earning assets. The bank also saw a 1% increase in average deposits, totaling $422.1 billion, largely due to growth in interest-bearing commercial deposits.

PNC has been preparing for potential economic challenges by increasing its provisions for credit losses, which rose to $243 million in the third quarter from $129 million a year ago. This move is part of a broader strategy within the banking industry to brace for potential defaults on credit card, mortgage, and other debts in a high-interest rate environment.

PNC's Chairman and CEO, Bill Demchak, expressed confidence in the bank's ability to capitalize on future opportunities, aiming for record net interest income in 2025. The bank's shares have risen nearly 22% in 2024, and were trading 1% higher before the market opened on the day of the earnings announcement.