PNC Bank 2006 Annual Report Download - page 13

information under the captions Line of Business Highlights,
Product Revenue, Cross-Border Leases and Related Tax and
Accounting Matters, and Business Segments Review in Item 7
of this Report here by reference. Also, we include financial
and other information by business in Note 21 Segment
Reporting in the Notes To Consolidated Financial Statements
in Item 8 of this Report here by reference.
We have four major businesses engaged in providing banking,
asset management and global fund processing products and
services: Retail Banking; Corporate & Institutional Banking;
BlackRock; and PFPC. Assets, revenue and earnings
attributable to foreign activities were not material in the
periods presented.
R ETAIL B ANKING
Retail Banking provides deposit, lending, brokerage, trust,
investment management, and cash management services to
approximately 2.5 million consumer and small business
customers within our primary geographic area. Our customers
are serviced through approximately 850 offices in our branch
network, the call center located in Pittsburgh and the Internet
–www.pncbank.com. The branch network is located primarily
in Pennsylvania; New Jersey; the greater Washington, DC
area, including Maryland and Virginia; Ohio; Kentucky; and
Delaware. Brokerage services are provided through PNC
Investments, LLC, and J.J.B. Hilliard, W.L. Lyons, Inc. Retail
Banking also serves as investment manager and trustee for
employee benefit plans and charitable and endowment assets
and provides nondiscretionary defined contribution plan
services and investment options through its Vested Interest®
product. These services are provided to individuals and
corporations primarily within our primary geographic markets.
Our goal is to generate sustainable revenue growth by
continuing to increase our customer base. We also seek
revenue growth by attempting to sell additional products and
services to these customers. In addition, we are focused on
optimizing our network of branches by opening and upgrading
stand-alone and in-store branches in attractive sites while
consolidating or selling branches with less opportunity for
growth.
C ORPORATE &I NSTITUTIONAL B ANKING
Corporate & Institutional Banking provides lending, treasury
management, and capital markets products and services to
mid-sized corporations, government entities and selectively to
large corporations. Lending products include secured and
unsecured loans, letters of credit and equipment leases.
Treasury management services include cash and investment
management, receivables management, disbursement services,
funds transfer services, information reporting and global trade
services. Capital markets-related products and services include
foreign exchange, derivatives, loan syndications, mergers and
acquisitions advisory and related services to middle-market
companies, securities underwriting, and securities sales and
trading. Corporate & Institutional Banking also provides
commercial loan servicing, real estate advisory and
technology solutions for the commercial real estate finance
industry. Corporate & Institutional Banking provides products
and services generally within our primary geographic markets,
with certain products and services provided nationally.
Corporate & Institutional Banking is focused on becoming a
premier provider of financial services in each of the markets it
serves. Its value proposition to its customers is driven by
providing a broad range of competitive and high quality
products and services by a team fully committed to delivering
the comprehensive resources of PNC to help each client
succeed. Corporate & Institutional Banking’s primary goals
are to achieve market share growth and enhanced returns by
means of expansion and retention of customer relationships
and prudent risk and expense management.
B LACK R OCK
BlackRock, Inc. (“BlackRock”) is one of the largest publicly
traded investment management firms in the United States. As
of December 31, 2006, BlackRock’s assets under management
were approximately $1.1 trillion. The firm manages assets on
behalf of institutions and individuals worldwide through a
variety of fixed income, cash management, equity, and
alternative investment separate account and mutual fund
products. In addition, BlackRock provides BlackRock
Solutions®, risk management, investment system outsourcing,
and financial advisory services to institutional investors. The
firm has a major presence in key global markets, including the
United States, Europe, Asia, Australia and the Middle East.
For additional information, please see BlackRock’s filings
with the SEC, accessible on the SEC’s website or on the
firm’s website at www.blackrock.com.
On September 29, 2006, Merrill Lynch contributed its
investment management business (“MLIM”) to BlackRock in
exchange for 65 million shares of newly issued BlackRock
common and preferred stock. Immediately following the
closing, PNC continued to own approximately 44 million
shares of BlackRock common stock. Accordingly, at
December 31, 2006, our ownership interest in BlackRock was
approximately 34%. Prior to this transaction, BlackRock had
been a majority-owned subsidiary of PNC. See Note 2
Acquisitions in the Notes To Consolidated Financial
Statements in Item 8 of this Report for further details
regarding the BlackRock/MLIM transaction.
Subsequent to the BlackRock/MLIM transaction, our
BlackRock investment continues to be a strategic asset of
PNC and a key component of our diversified earnings stream.
The ability of BlackRock to grow assets under management is
the key driver of increases in its revenue, earnings and,
ultimately, shareholder value. BlackRock’s strategies for
growth in assets under management include a focus on
achieving client investment performance objectives in a
manner consistent with their risk preferences and delivering
excellent client service. The business dedicates significant
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