PNC Bank 2011 Annual Report Download - page 3

Tier 1 Common Capital Ratio
At Year End
Banking in a New Environment As I look at the business world today, there’s
no doubt that we are experiencing unprecedented change. Less than a decade ago Twitter didn’t
exist. Neither did Facebook or Skype. Blockbuster was the number one entertainment company in
the United States, and Apple was rumored to be on the verge of bankruptcy.
In the banking industry, we are experiencing sweeping changes in customer preferences and almost
daily advances in technology. We are operating at a time of historically low interest rates, important
new regulations and a challenging political environment.
At PNC, we have always taken the long view. While some banks regard the current environment as
a time for contraction, we see it as an opportunity. And we believe we are
better positioned today than we have ever been in the 160-year history of
the company.
Our capital and liquidity positions are strong. We have a highly competitive
set of products and services to meet our customers’ needs. Our existing markets are profitable and
we are entering new ones that provide the potential for significant growth. And we have outstanding
employees who are led by a management team that is committed to delivering for our customers,
shareholders and communities.
PNC’s performance over time is reflected in our share price. For the last five-year period, we have
ranked first in cumulative total shareholder return among our peer banks.* Although our share
price declined 5 percent in 2011, the S&P 500 Banks index declined by 12 percent.
While these are good results on a relative basis, no one ever made money on a relative basis.
At PNC we manage our business with the goal of creating opportunities for increased shareholder
value over the long term.
Meeting Our Highest Capital Priorities In the
current regulatory environment, great attention is being paid to capital
adequacy and for good reason. Banks need sufficient capital to weather
changes in the global economy.
Today, most U.S. banks have stronger capital and liquidity than at the height of
the 2008 downturn. In fact U.S. bank capital ratios are at their highest levels in
six decades.
2011
10.3%
While some banks regard the current
environment as a time for contraction, we see
it as an opportunity. And we believe we are
better positioned today than we have ever
been in the 160-year history of the company.
2010
9.8%
* PNC’s 2011 peer group consists of BB&T Corporation, Bank of America Corporation, Capital One Financial Corporation, Comerica Incorporated,
Fifth Third Bancorp, JPMorgan Chase & Co., KeyCorp, M&T Bank Corporation, The PNC Financial Services Group, Inc., Regions Financial
Corporation, SunTrust Banks, Inc., U.S. Bancorp, and Wells Fargo & Company.
6.0%
2009