PNC Financial Services Group is getting to look more and more like its Pittsburgh neighbor, Mellon Financial Corp. PNC's fee income is rising and its dependence on lending is falling. It is getting more deeply into asset management and back office processing. And while its p/e hasn't yet reached Mellon's lofty levels, it is pulling away from the pack. Between year-end 1999 and late October, PNC's stock climbed 36%, trailing only State Street Corp. and edging out such superstars as Mellon and the Bank of New York Co. James E. Rohr, PNC's 51-year-old chief executive, attributes the stock's climb to the tilt away from dependence on interest income to greater reliance on fee income. But unlike some of its successful competitors, Rohr sees traditional corporate and retail banking continuing to play an important role. Following is an interview with Robert A. Bennett, editor-in-chief of U.S. Banker.
USB: I see that your stock hit an all-time high today [Oct. 3] of $67.69. Can it go further? ROHR: We have some opportunity for the stock to go higher yet. We've created a mix of businesses that gives us a very good chance of delivering on our objective: to deliver a consistent, double-digit net income growth over a long period of time. Those kinds of companies trade with multiples of 20.