PNC Financial Lowers Profit by $155 Million
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PNC Financial Services Group reduced 2001 net income by about $155 million after the Federal Reserve forced it to restate its earnings.
The bank, which for a year has been reducing the bad loans on its books by selling them to investors, set up firms with an insurer last year designed to buy its loans and sell them over time. The Federal Reserve told PNC in recent weeks that the companies weren’t accounted for properly.
PNC shares fell $5.79, or 9.4%, to $56.08 on the NYSE.
The Federal Reserve told PNC to consolidate the accounting for three subsidiaries to comply with generally accepted accounting principles, the company said.
That differed from the advice of PNC’s auditors, Ernst & Young, the company said. The bank said it is cooperating with inquiries by the Fed, which regulates banks, and the Securities and Exchange Commission.
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