Third-quarter profit at
surged on a big gain stemming from the bank's investment in
, the asset-management firm that has combined some of its operations with
In the quarter, the Pittsburgh-based lender earned $1.5 billion, or $5.01 a share, up fourfold from $334 million, or $1.14 a share, a year ago. But much of that spike in net income came from a $1.3 billion gain from its BlackRock investment.
Excluding the BlackRock gain and a charge associated with the previously announced sale of some poor-performing mortgage-backed securities, PNC posted operating earnings of $380 million, or $1.28 a share. On that basis, the bank exceeded the Thomson Financial consensus estimate of $1.23 a share.
This summer, Merrill Lynch and BlackRock completed a deal that merges their asset-management operations. The deal reduced PNC's once-considerable equity stake in BlackRock to about 34%. BlackRock has always been a big contributor to the bank's bottom line.
Net interest income, the profit derived from a bank's lending and deposit operation, rose a mere 1% from a year ago to $574 million. The bank's net interest margin, a measure of the profitability of its lending and deposit operation, got squeezed a bit, falling to 2.89%, down from 2.96% last year.
Retail banking, however, was strong, posting a 17% gain in earnings to $206 million.