PNC Bank 2010 Annual Report Download - page 55
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USINESS
S
EGMENTS
R
EVIEW
We have six reportable business segments:
• Retail Banking
• Corporate & Institutional Banking
• Asset Management Group
• Residential Mortgage Banking
• BlackRock
• Distressed Assets Portfolio
Once we entered into an agreement to sell GIS, it was no
longer a reportable business segment. We sold GIS on July 1,
2010.
Business segment results, including inter-segment revenues,
and a description of each business are included in Note 25
Segment Reporting included in the Notes To Consolidated
Financial Statements of Item 8 this Report. Certain amounts
included in this Item 7 differ from those amounts shown in
Note 25 primarily due to the presentation in this Item 7 of
business net interest revenue on a taxable-equivalent basis.
Results of individual businesses are presented based on our
management accounting practices and management structure.
There is no comprehensive, authoritative body of guidance for
management accounting equivalent to GAAP; therefore, the
financial results of our individual businesses are not
necessarily comparable with similar information for any other
company. We refine our methodologies from time to time as
our management accounting practices are enhanced and our
businesses and management structure change. Certain prior
period amounts have been reclassified to reflect current
methodologies and our current business and management
structure. Financial results are presented, to the extent
practicable, as if each business operated on a stand-alone
basis. We have aggregated the business results for certain
similar operating segments for financial reporting purposes.
Assets receive a funding charge and liabilities and capital
receive a funding credit based on a transfer pricing
methodology that incorporates product maturities, duration
and other factors. Capital is intended to cover unexpected
losses and is assigned to the banking and servicing businesses
using our risk-based economic capital model. We have
assigned capital equal to 6% of funds to Retail Banking to
reflect the capital required for well-capitalized domestic banks
and to approximate market comparables for this business.
We have allocated the ALLL and unfunded loan commitments
and letters of credit based on our assessment of risk inherent
in the business segment loan portfolios. Our allocation of the
costs incurred by operations and other shared support areas
not directly aligned with the businesses is primarily based on
the use of services.
Total business segment financial results differ from total
consolidated results from continuing operations before
noncontrolling interests, which itself excludes the earnings
and revenue attributable to GIS through June 30, 2010 and the
related after-tax gain on sale in third quarter 2010 that are
reflected in discontinued operations. The impact of these
differences is reflected in the “Other” category. “Other” for
purposes of this Business Segments Review and the Business
Segment Highlights in the Executive Summary includes
residual activities that do not meet the criteria for disclosure as
a separate reportable business, such as gains or losses related
to BlackRock transactions including LTIP share distributions
and obligations, integration costs, asset and liability
management activities including net securities gains or losses
and certain trading activities, exited businesses, equity
management activities, alternative investments, intercompany
eliminations, most corporate overhead, and differences
between business segment performance reporting and
financial statement reporting (GAAP), including the
presentation of net income attributable to noncontrolling
interests.
Period-end Employees
Dec. 31
2010
Dec. 31
2009
Full-time employees
Retail Banking 20,925 21,416
Corporate & Institutional Banking 3,756 3,746
Asset Management Group 3,001 2,969
Residential Mortgage Banking 3,539 3,267
Distressed Assets Portfolio 167 175
Other
Operations & Technology 8,712 9,249
Staff Services and other (a) 4,717 8,939
Total Other 13,429 18,188
Total full-time employees 44,817 49,761
Retail Banking part-time employees 4,965 4,737
Other part-time employees 987 1,322
Total part-time employees 5,952 6,059
Total 50,769 55,820
(a) Includes employees of GIS 4,450 at December 31, 2009. We sold GIS effective
July 1, 2010.
Employee data as reported by each business segment in the
table above reflects staff directly employed by the respective
businesses and excludes operations, technology and staff
services employees reported in the Other segment. Total
employees have decreased since December 31, 2009 primarily
as a result of the sale of GIS.
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