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PNC’s Demchak Talks Banking and Economy in Latest W&D Webcast
“Branches matter,” CEO Bill Demchak of PNC Financial Services Group said on this week’s Walker & Dunlop webcast. However, bank branches don’t matter today in quite the ways they once did: Demchak noted that whereas PNC may have had 100 branches in a market in former years, today that number might be 15.
The shift to digital banking channels has been especially pronounced during the COVID-19 pandemic and the resulting shutdowns nationwide. With only a handful of drive-through locations remaining open for the moment, PNC customers are doing 75% of their banking online, said Demchak.
“My suspicion is that many of these people won’t come back” to using traditional channels, Demchak told Walker & Dunlop CEO Willy Walker.
The impact on banking formats has been only one of the ways in which daily life has been affected by the pandemic, and Demchak believes both the virus and its economic ramifications will be with us for some time to come.
With what Walker termed a “hurricane” predicted for the third quarter, as many of the current mechanisms in place to provide economic relief are due to expire, Demchak agreed that it may be only then that we’ll understand the full economic impact of the pandemic and the shutdowns.
Yet, Demchak doesn’t see a hurricane in the forecast. What we’ll see instead will be more comparable to an extended tropical storm that parks itself off the coast “and pelts us with rain.”
Come hurricane winds or extended soak, though, Demchak does anticipate that there will be distress—and potential acquisition opportunities. He noted that the company’s Midland Loan Services, among the country’s largest servicers of CMBS, has already seen its special servicing volume reach about half the levels the company handled during the Great Recession.
With PNC a longstanding champion of increasing diversity, Demchak said the recent protests, and the dialogue they’ve opened up, point to a need to confront the issue. “This is America’s problem now,” he said. “It’s not somebody else’s.”
On-demand replays of the July 1 webcast are available by clicking here.
For comments, questions or concerns, please contact Paul Bubny
- ◦Economy
- ◦Financing
