PNC Bank 2002 Annual Report Download - page 5

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Some of our businesses have
performed well through this
challenging economy. Our
deposit-driven Regional
Community Banking (RCB)
franchise contributed 55% of
total business earnings in 2002.
Through developing a culture
that fosters sales and customer
satisfaction, the RCB grew its
checking account base by 7%.
We believe our premier
technology platform and high-
quality customer service should
enable us to make these relation-
ships more beneficial to both
the customer and PNC.
Another of our businesses,
BlackRock, once again delivered
strong results. It grew earnings
24% in 2002 to $133 million by
leveraging its expertise and solid
track record in fixed income and
liquidity performance.
Since 1996, BlackRock has
fueled extraordinary growth in
earnings and assets under manage-
ment. I believe its investment
management expertise, combined
with strengths in risk management,
should enable BlackRock to con-
tinue delivering premium growth.
In a number of our other
businesses, the environment
has been more challenging.
In Wholesale Banking,
which includes Corporate
Banking, PNC Real Estate
Finance, and PNC Business
Credit, we’ve worked to reduce
risk and improve asset quality.
Because we made a strategic
decision to exit many lower-
return credit relationships, rev-
enue has been pressured. We’re
largely done with that work now.
We’re looking to drive future
growth in this business by focus-
ing on middle market clients in
the regions we serve. We have a
significant opportunity to deepen
relationships by selling fee-based
treasury management and capital
markets products. In addition,
eliminating redundancies
should help Wholesale Banking
reduce expenses.
At PNC Advisors and PFPC,
our wealth management and global
fund servicing businesses, the declin-
ing equity markets and client attri-
tion have adversely affected revenue.
We had built up these busi-
nesses in past years to compete
in what many anticipated would
be a robust and rapidly growing
equity market. As that is no longer
the case, we’re implementing strate-
gies to improve operating efficiency
while also emphasizing client
retention and growth.
The team at PNC Advisors is
focused on its investment perform-
ance and high-touch service as
keys to attract and sustain a strong
customer base. PFPC’s sales team
has been restructured to better
leverage the company’s leading
technology-based solutions.
Along with our balance sheet
and diverse mix of businesses,
we believe two other factors differ-
entiate PNC — our technology
capabilities and our people.
Driven by Chief Information
Officer Tim Shack, who is also now
leveraging this expertise as Chief
Executive Officer of PFPC, we’re
using technology to make business
easier for our customers, improve
processes for our employees, and
create value for our shareholders.
This success has been widely
recognized by industry experts.
Information Week ranked PNC
35th overall and the second highest
bank in its annual list of the nation’s
top 500 technology innovators.
In addition, an initiative that helped
3
A Valuable Mix of Businesses
Differentiating PNC