PNC Names Demchak President; May Be CEO's Successor
First Published Tuesday, 24th April 2012 10:40 pm - © 2012 Dow Jones
--Demchak joined PNC in 2002
--Demchak was part of a team pioneering credit derivatives
(Adds background about Demchak starting in second graph, and analyst and investor comments, starting in third graph.)
By Matthias Rieker and Mia Lamar
Of Dow Jones NEWSWIRES
NEW YORK -(Dow Jones)- PNC Financial Services Group Inc. (PNC) named longtime executive William S. Demchak as president, putting him on track for a potential future in the lender's corner office.
Demchak, 49 years old, who was once part of a team of bankers instrumental in developing credit derivatives at J.P. Morgan Chase & Co. (JPM), has been senior vice chairman at PNC since 2009 and has held supervisory responsibility for all of the Pittsburgh bank's businesses since 2010. He first joined in 2002 as its chief financial officer.
Demchak has helped steer PNC through the financial crisis in better shape than many banks. PNC is the ninth largest bank by assets, and has bought a string of troubled banks before and during the financial crisis. Demchak's ascent is a sign that the bank is holding steady in its strategy of expansion and independence.
Frank J. Barkocy, the director of research at Mendon Capital Advisors Corp, said he expects Chief Executive James Rohr to remain at the helm of PNC for another year.
With Demchak, "PNC will be in good hands for many years to come" he said. "He has a broad background with the firm and many successes in the businesses he has run."
Wells Fargo Securities analyst Matthew Burnell wrote in a research report, "Demchak is held in high esteem by investors and adding certainty to the management succession process at PNC with this election is a marginal positive."
Prior to coming to PNC, Demchak worked as head of J.P. Morgan Chase's structured-finance and credit-portfolio unit. He was part of a team of bankers who pioneered credit derivatives, along with Blythe Masters, now J.P. Morgan's head of global commodities.
CEO Rohr, 63 as of March, has served as the lender's CEO since 2000. He, too, was president before he ascended to become CEO. Rohr, who is also chairman of PNC's board, first joined the company in 1972.
Like its fellow lenders, PNC has been able to steadily reduce its reserve set aside to cover bad loans as credit conditions in the U.S. continue to improve.
The company's first-quarter profit fell 3.8% as results took a hit from costs tied to its $3.45 billion acquisition of Royal Bank of Canada's (RY, RY.T) U.S. retail-banking unit.
Shares closed up 0.91%, at $65.57.
-By Matthias Rieker and Mia Lamar, Dow Jones Newswires; 212-416-2471; firstname.lastname@example.org