PNC Cuts Dividend

PNC Financial Services says it will reduce the company's quarterly common stock dividend from 66 cents to just 10 cents per share as of its next dividend that is due out next month. PNC CEO Jim Rohr says "We are taking this proactive step to build capital, further strengthen our balance sheet and serve our customers in an unprecedented and uncertain economy." In an investor conference call Rohr went on to say, "While our overall capital and liquidity positions are strong, extreme market deterioration and the changing regulatory environment drove this difficult but prudent decision.” PNC is in the process of taking over National City and Rohr says that is going smoothly and is expected to help the company going forward. He says PNC's businesses are performing as expected in the first quarter with strong client growth. Sales are above expectations, and the company continues to increase share in its newly acquired markets. One goal of the dividend reduction is to help make credit available to customers. Rohr says the move should also, “…position PNC for full redemption of the U.S. Treasury Department's preferred stock investment as soon as appropriate.” The move is expected to save PNC about $1 billion a year.