Zhitong Finance learned that PNC Financial Services Group (PNC.US) said it will spend an additional $500 million to double its branch expansion and renovate more existing bank branches. The Pittsburgh-based bank plans to add more than 100 branches in cities such as Atlanta and Phoenix and renovate 200 existing branches. Earlier this year, the company announced a plan to spend about $1 billion to open more than 100 new branches in Texas, Florida and Colorado and renovate 1,200 of its 2,200 branches in the U.S.
"From a demographics perspective, these cities are obviously very attractive," said Alex Overstrom, head of PNC's retail banking, in an interview. "They're growing, and they're growing very quickly."
Despite the rise of online banking and mobile banking apps, as well as ubiquitous ATMs, industry executives see value in having a strong physical presence.
"We still have a significant number of customers who open accounts at branches, and PNC has more digitally focused customers in markets where we have branches, due to the brand awareness," Overstrom said. "In addition, customers at physical branches are often easier to discuss home loans, retirement plans and other financial products with bank employees."
Earlier this year, JPMorgan Chase (JPM.US), the largest bank in the U.S., announced plans to open more than 500 new branches and hire 3,500 employees over the next three years. Competitor Bank of America (BAC.US) said last year it would open branches in nine new markets, including New Orleans, Milwaukee and Boise, Idaho, by 2026.
PNC's third-quarter results, which it reported last month, topped expectations, driven by higher-than-expected net interest income and non-interest income and lower-than-expected loan loss provisions.