UPDATE 1-PNC Financial 3rd-qtr profit rises on Visa share sale

Tue Oct 16, 2012 7:05am EDT

* Q3 EPS $1.64 vs $1.55 year earlier

* Net income rises 11 percent

* Books $137 mln pre-tax gain on Visa share sale

Oct 16 (Reuters) - PNC Financial Services Group Inc's quarterly profit rose 11 percent, boosted by the sale of a portion of its stake in debit and credit-card network Visa Inc .

The bank's net income rose to $925 million, or $1.64 per share, in the third quarter from $834 million, or $1.55 per share, a year earlier.

The Pittsburgh-based bank sold 5 million Visa Class B common shares in the quarter, resulting in a pre-tax gain of $137 million.

PNC, one of the 10 largest banks in the United States, still owns about 18 million Visa Class B shares with a fair value of about $1 billion, as of Sept. 30.

The company set aside $37 million to cover possible mortgage repurchase requests in the third quarter, a sharp decline from the $438 million it set aside in the second quarter, signaling that demands for put-backs may be ebbing.

Government-backed mortgage financiers Fannie Mae and Freddie Mac have been pressing U.S. banks to buy back soured home loans made during the housing boom.

The loans had been bundled into mortgage-backed securities and bought by outside investors, who now allege they do not meet guarantees made by the banks when they were sold.

Residential mortgage banking income rose 15 percent from a year earlier as loan origination volume grew.

Total loans grew $1.5 billion to $182 billion.

PNC shares closed at $62.93 on Monday on the New York Stock Exchange.

They have risen about 9 percent this year, trailing KBW regional bank index, which has risen about 11 percent in the same period.

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