The PNC Financial Services Group, Inc.’s (PNC) principal subsidiary PNC Bank has recently received a license from Canada's Office of the Superintendent of Financial Institutions for expanding its commercial banking footprint services in Canada. This confirms the company’s strategy to focus more on growing economies.
At present, PNC Financial operates in Canada through offices in Toronto, Calgary, Montreal and Vancouver. Since its inception in Canada in 2001, the company has been operating as a commercial lending foreign bank.
The latest approval will enable PNC Financial to offer enhanced services to existing customers in Canada as well as U.S. clients having business operations in Canada. Apart from lending, the company will now accept deposits as well as offer a wide range of treasury management services.
Trade has been the principal factor behind the growth of the flourishing Canadian economy. The country’s economy has been growing steadily over the past few quarters wherein the basic economic parameters like GDP and rate of unemployment reflected improvement.
The U.S. economy has witnessed signs of improvement but the rate of growth has been sluggish. Therefore, the latest move will not only strengthen PNC Financial’s international presence but will also help it to capitalize on the comparatively profitable Canadian economy.
Moreover, given the strong trade relation between the U.S and Canada, PNC Financial’s expansion in Canadian soil will help it cater to cross-border financing and banking needs of customers.
In an exclusive interview with Bloomberg, George Hoffman, Senior Vice President of PNC Financial’s global treasury management group, confirmed that the company is not keen to compete with existing Canadian banks.
The Canadian economy is dominated by banking majors like The Toronto-Dominion Bank (TD), Canadian Imperial Bank of Commerce (CM) and Royal Bank of Canada (RY). Given the sound capital position, market share and local expertise of these banks, PNC Financial will gradually face some competition with its expansion in Canada.
PNC Financial currently holds a Zacks Rank #2 (Buy).