BlackRock shares have gained 30% this year and are trading near an all-time high. The market value of PNC's stake in the world's largest asset manager is $9.46 billion, according to data compiled by Bloomberg, while the Pittsburgh-based lender carries the 18-year-old investment on its balance sheet at $5.6 billion.
Selling the stock could allow the bank, led since April by Chief Executive Officer Bill Demchak, 50, to return billions in capital to investors and potentially boost its share price. By retaining its position as BlackRock's largest shareholder, PNC maintains a steady earnings stream at a time when tepid loan growth and low interest rates have squeezed lenders' margins.
“How does any investor deal with that, especially one that's a publicly traded company?” said Terry McEvoy, an Oppenheimer & Co. analyst. “Do you sell a business that is more profitable? And then what's the offset?”
PNC will “at some point” recognize the value and “do something,” Chief Financial Officer Richard Johnson said at a May 21 investor conference. Eight months earlier, former CEO Jim Rohr, 64, said he didn't think PNC should sell the stake as doing so would reduce the lender's diversification.