PNC Bank Slashes Dividend to Conserve Cash

PNC Financial Services Group, which used some of a $7.6 billion taxpayer infusion to buy lender National City, cut its dividend 85 percent on Monday to preserve capital.

PNC said first-quarter results so far were in line with Wall Street forecasts, excluding merger costs. Analysts, on average, expect quarterly profit of 49 cents per share, according to Reuters Estimates.

The seventh-largest U.S. bank said it reduced its common stock dividend to 10 cents per share from 66 cents, adding $1 billion to common equity per year.

PNC, based in Pittsburgh, joins a growing list of major U.S. banks reducing or eliminating dividends. The lender operates mainly in U.S. mid-Atlantic and Midwest states.

"While our overall capital and liquidity positions are strong, extreme market deterioration and the changing regulatory environment drove this difficult but prudent decision," Chief Executive James Rohr said in a statement.

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Rohr said PNC has no plans to issue more common equity, and plans to pay back the $7.6 billion capital infusion from the government's Troubled Asset Relief Program "as soon as appropriate."

He said the integration of National City was on track, and that the purchase would add to 2009 earnings.

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