PITTSBURGH - PNC Financial Services Group on Thursday made two moves to expand its fee-based businesses with the completion of one acquisition and the announcement of a deal to buy an auto-leasing subsidiary of Bank of Tokyo-Mitsubishi Ltd.
In the newly announced deal, which is slated to close in the third quarter, PNC would buy $1.2 billion-asset U.B. Vehicle Leasing Inc. Terms were not disclosed.
"It gives us the ability to expand the business beyond our existing footprint," said Jim Bruzotta, president of PNC Dealer Finance Corp. "It's also going to double our vehicle leasing origination business."
In the completed deal, PNC's asset servicing arm, PFPC, purchased Automated Business Development Corp., a provider of Blue-Sky compliance services to the mutual fund industry. Terms were not disclosed.
U.B. Vehicle deals primarily with high-end auto leases, a niche that PNC has not focused on in the past. Buying it would give PNC access to six areas where it has no presence: New York; Chicago; West Palm Beach, Fla.; Springfield, Mass.; St. Louis; and Atlanta, Mr. Bruzotta said.
In the first quarter roughly 58% of $74.3 billion-asset PNC's revenues came from fees.
"In the last few years they have clearly made a transition to more of a fee-income company," said Joseph Duwan, an analyst who follows PNC for Keefe, Bruyette & Woods Inc. in New York.
Also as part of the auto leasing deal, PNC said it is entering into an agreement to service about $1.3 billion in lease receivables previously handled by BTM Capital of Boston, the companies said. The agreement does not involve PNC's picking up any assets.
Last year BTM Capital originated and structured $4.3 billion in vehicle financing.
Mr. Duwan said the U.B. Vehicle purchase probably is not a large one for PNC. The acquisition of Automated Business Development Corp., meanwhile, "fits in well their mutual fund processing business," he said.
