PNC Bank 2009 Annual Report Download - page 8

Corporate & Institutional Banking is focused on becoming a
premier provider of financial services in each of the markets it
serves. The 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.
Asset Management Group includes personal wealth
management for high net worth and ultra high net worth
clients and institutional asset management. Wealth
management products and services include financial planning,
customized investment management, private banking, tailored
credit solutions and trust management and administration for
individuals and their families. Institutional asset management
provides investment management, custody, and retirement
planning services. The institutional clients include
corporations, foundations and unions and charitable
endowments located primarily in our geographic footprint.
This segment includes the asset management businesses
acquired through the National City acquisition and the legacy
PNC wealth management business previously included in the
Retail Banking segment.
Asset Management Group is focused on becoming one of the
premier bank-held wealth and institutional asset managers in
each of the markets it serves. The business seeks to deliver
high quality advice and investment management to our high
net worth, ultra high net worth and institutional client sectors
through a full array of products and services. Asset
Management Group’s primary goals are to service its clients,
grow its business and deliver solid financial performance with
prudent risk and expense management.
Residential Mortgage Banking directly originates primarily
first lien residential mortgage loans on a nationwide basis with
a significant presence within our retail banking footprint and
also originates loans through joint venture partners. Mortgage
loans represent loans collateralized by one-to-four-family
residential real estate and are made to borrowers in good
credit standing. These loans are typically underwritten to
government agency and/or third party standards, and sold,
servicing retained, to primary mortgage market conduits
Federal National Mortgage Association (Fannie Mae), Federal
Home Loan Mortgage Corporation (Freddie Mac), Federal
Home Loan Banks and third-party investors, or are securitized
and issued under the Government National Mortgage
Association (Ginnie Mae) program. The mortgage servicing
operation performs all functions related to servicing first
mortgage loans for various investors. Certain loans originated
through our joint ventures are serviced by a joint venture
partner. In November 2009, we reduced our joint venture
relationship related to our legacy PNC business and rebranded
the former National City Mortgage as PNC Mortgage.
Residential Mortgage Banking is focused on adding value to
the PNC franchise by building stronger customer
relationships, providing quality investment loans, and
delivering acceptable returns under a moderate risk profile.
Our national distribution capability provides volume that
drives economies of scale, risk dispersion, and cost-effective
extension of the retail banking footprint for cross-selling
opportunities.
BlackRock is the largest publicly traded investment
management firm in the world. BlackRock manages assets on
behalf of institutional and individual investors worldwide
through a variety of equity, fixed income, multi-asset class,
alternative and cash management separate accounts and funds.
In addition, BlackRock provides market risk management,
financial markets advisory and enterprise investment system
services globally to a broad base of clients.
At December 31, 2009, our share of BlackRock’s earnings
was approximately 23%. Our investment in BlackRock is 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 resources to attracting and
retaining talented professionals and to the ongoing
enhancement of its investment technology and operating
capabilities to deliver on this strategy.
Distressed Assets Portfolio includes commercial residential
development loans, cross-border leases, consumer brokered
home equity loans, retail mortgages, non-prime mortgages,
and residential construction loans. These loans require special
servicing and management oversight given current market
conditions. The majority of these loans are from acquisitions,
primarily National City. Total loans were $18.5 billion at
December 31, 2009.
The business activities of this segment are focused on
maximizing the value of the assets while mitigating risk.
Business intent drives the inclusion of assets in this business
segment. Not all impaired loans are included in this business
segment, nor are all of the loans included in this business
segment considered impaired. The fair value marks taken
upon our acquisition of National City, the team we have in
place and targeted asset resolution strategies help us to
manage these assets. Additionally, our capital and liquidity
positions provide us flexibility in a challenging environment
to optimize returns on this portfolio for our shareholders.
SUBSIDIARIES Our corporate legal structure at December 31,
2009 consisted of one domestic subsidiary bank, including its
subsidiaries, and approximately 153 active non-bank
4