PNC Financial Services takes $7.7 billion in taxpayers’ dollars then cuts 5,800 jobs.
New York, NY (JusticeNewsFlash.com)–PNC Financial Services Group, with corporate headquarters in Pittsburgh, Pennsylvania, announced Tuesday morning they plan to cut 5,800 jobs as reported by the Associated Press. PNC Financial Services took $7.7 billion, from the United States Treasury in Troubled Asset Relief Program (TARP) money in the past few months, and promptly bought National City Bank for $5.2 billion in stock and $384 million in cash reported the New York Times in their January 17, 2009, Bailout is a Windfall to Banks, if Not to Borrowers article http://www.nytimes.com/2009/01/18/business/.
As more Americans continue to lose their jobs, credit lines, paychecks, homes and soon their dinners, the number one question remains the same: Where is all the federal bailout money going? PNC reported a fourth quarter loss also on Tuesday. Financial numbers are rather interesting. According to the Associated Press, PNC said it earned $132 million, or 32 cents per share, excluding integration costs of National City Bank. Analysts expected earnings of 75 cents per share but the kicker here is do not be fooled. They still made money. PNC reports a fourth quarter loss of $248 million, or 77 cents per share. They lost less than $1 per share. They gained National City.
PNC claims the loss is due to increased credit provisions plus the costs of their recent acquisition of National City. This complicated mess leaves one simple question. If National City cost PNC $5.5 billion to acquire, and PNC just cashed a $7.7 billion check from American taxpayers, how come the remaining $2.2 billion doesn’t cover the paychecks of 5,800 employees?
Reporter Mike McIntire of the New York Times quoted, John C. Hope III, chairman of Whitney National Bank in New Orleans, regarding a question of how his bank planned to use the $300 million in federal bailout money they had just received in late 2008. In regards to loaning the TARP money Hope stated, “We’re not going to change our business model or our credit policies to accommodate the needs of the public sector as they see it to have us make more loans.” Mr. Hope didn’t seem to have a problem taking a $300 million gift from the public sector by way of a check from U.S. taxpayers. Did he just basically say, “Let them eat cake!” According to BusinessWeek http://investing.businessweek.com/research/
John C. Hope III is Chairman, Chief Executive Officer and Member of Executive Committee, Whitney Holding Corp., and has been employed with Whitney, in an executive capacity since 1993. Hope’s total annual compensation in 2007 was $467,500. His total calculated compensation is $2,367,935 not bad for a 58 year-old man.
U.S. consumers, workers, and most importantly bank and Wall Street executives need to understand Congress approved $700 billion in rescue funds under the idea banks would immediately help struggling borrowers (average Americans) by increasing lending to stimulate the economy. The bottom line: banks are hoarding our money. I don’t think this was the idea President Barack Obama had in mind.
H. Ryan for JusticeNewsFlash.com legal news for New York business litigation lawyers.