What risks could derail PNC's earnings momentum in 2025?

PNC's earnings momentum in 2025 could be derailed by several risks: 1. **Office CRE Portfolio Stress**: PNC continues to experience stress in its office CRE portfolio, with reserves increasing to 13% and further charge-offs expected. This poses a significant challenge for the company and could negatively impact earnings. 2. **Interest Rate Fluctuations**: While PNC's Basel III CET1 capital ratio increased to 10.5% at the end of 2024, and the company repositioned its investment securities portfolio to better handle higher-yielding investments, unexpected interest rate fluctuations could still affect the company's financial performance. 3. **Reputational Risks**: PNC faces reputational risks from stakeholders' expectations regarding environmental, social, and governance matters. These risks could lead to foregone profit opportunities and impact customer and employee relationships, potentially affecting earnings. 4. **Competitive Pressures and Technological Adaptation**: PNC is subject to competitive pressures and needs to adapt to technological changes in the banking sector. Failing to keep pace with competitors or innovate could lead to a loss of market share and negatively impact earnings. 5. **Regulatory and Policy Changes**: PNC's earnings are also exposed to the impacts of changes in federal, state, and local governmental policy, including on the regulatory landscape, capital markets, taxes, infrastructure spending, and social programs. Unexpected changes in these policies could create uncertainty and negatively affect earnings. 6. **Commodity Price Volatility**: PNC's earnings are sensitive to commodity price volatility. Significant changes in commodity prices could affect the company's financial performance and earnings. In summary, while PNC has taken steps to mitigate certain risks, unexpected developments in office CRE, interest rates, reputation, competition, regulation, and commodities could still derail the company's earnings momentum in 2025.