PNC Financial Services CFO Robert Reilly Discusses Firm’s Evolution in Commercial Banking and the Importance of Change

PNC Financial Services CFO and Executive Vice President Robert Reilly (B’87) spoke at Georgetown’s McDonough School of Business on Sept. 24 about PNC’s evolution as a commercial bank as well as its future. The event was moderated by Katherine Waldock, assistant professor of finance, and sponsored by the Stanton Distinguished Leaders Series. 

Reilly joined PNC after graduating from Georgetown McDonough with a degree in finance. “I started in the management training program. Within a month, the market crashed,” he said. 

It would not be the first financial crisis that Reilly would weather at the company.

While Reilly has served in many different positions at PNC, the biggest lesson he has learned is the constant cycle of change that occurs in all sectors of the economy. 

“When I go back, the three biggest categories of change in my 32 years were the economic cycle, technology, and regulatory oversight,” he said.

However, he said not all change is bad. “Make change your friend,” Reilly advised. “Things do change. As you go into a professional setting, if you can get in your mind that change opens new doors, your career will really benefit from it.”

One positive aspect of change for banks, according to Reilly, has been their massive consolidation  across the last few decades, leading to fewer, but larger, investment and commercial banks. PNC, for example, has grown to become the sixth largest bank in the United States today, with a market capitalization of over $65 billion and management of $400 billion in assets. In 2005, its market cap was less than $15 billion.

A lot of this growth has been affected by government policies and regulations of banks in the United States. “Banking is a regulated industry, and has been since the Great Depression,” Reilly explained. 

In the late 1990s, Reilly was heavily involved in the regulation process as a representative of PNC. “I was trying to convince the government that a lot of their regulations weren’t necessary,” he said. “Generally speaking, the last six years or so have been a pretty good economic climate. The U.S. consumer is probably in the best shape financially in my lifetime.”

Nevertheless, after the financial crisis in 2008, U.S. banks had to rethink many of their strategies and risks. Reilly highlighted that although the distinction between investment banks and commercial banks has been blurred since the late 1990s, PNC ultimately remains a commercial bank. This reduces the risk for PNC and allows for many consumer benefits from the U.S. government, such as FDIC insurance. 

Even after the financial crisis, however, Reilly warns that many banks are still engaged in risky behavior. “Leveraged lending is real. There are companies carrying high levels of debt to take advantage of low interest rates. If interest rates rose, these companies would be in big trouble,” he said.

Reilly also noted the change from constant updates to technology and the uncertainty that it brings to all facets of life. “When you talk about technology, in the 80s and 90s we were always talking about it but we weren’t always right. People predicted nobody would use ATMs.”

Reilly reminded the audience that change can either be utilized or can be punishing. To succeed in the banking industry, or the American economy in general, he said, it is always important to “make change your friend.”