PNC Bank 2013 Annual Report Download - page 7

Bolstering critical infrastructure and streamlining core processes
We entered 2013 with an imperative to manage
expenses and improve our operational efficiency.
It was not so much a strategic objective as the
natural next step. Throughout the financial
crisis, as other institutions made dramatic cuts
in order to survive, PNC invested heavily to grow.
Our acquisitions of National City Corporation
and the retail branch network of RBC Bank
(USA) opened up unprecedented opportunities
for future organic growth in new markets. But
the integration of those businesses, along with
a number of other smaller acquisitions, came
with expected costs and left in place numerous
inefficiencies throughout our organization.
In 2013, having fully ramped up our new
operations in the Southeast, we shifted our
focus to capitalizing on the organic growth
opportunities our recent acquisitions had
created, and we committed to reduce expenses
and improve efficiency.
Through the disciplined efforts of our entire
organization, last year we exceeded our
$700 million continuous improvement goal,
reduced expenses by 7 percent year over
year, and improved our efficiency ratio from
68 percent to 61 percent.
We launched a major, multi-year effort to make
targeted investments to build a better backbone
for critical systems capable of supporting the
company we have become for the foreseeable
future and to identify opportunities for significant
efficiency and expense improvements through
automation and the elimination of redundancies
across our operations.
We plan to fund these ongoing investments in
our businesses – including the transformation of
our retail branch network – through continuous
improvement efforts, and we will look to further
reduce expenses and improve efficiency over time.
to closing more efficiently and faster than
our competition, and to improve the quality of
service our customers receive throughout the
process and beyond.
We reached settlements relating to residential
mortgage repurchase obligations with Fannie
Mae and Freddie Mac that will take some of the
uncertainty out of this business. At the same
time, we took steps on expenses in line with the
decline in refinance loan origination volume, and
we will continue to monitor and manage against
these trends.
In the end, we know that buying a home is
the most important and complex financial
transaction most customers will ever undertake.
It is made more complex by the volume of new
regulations introduced in recent years, which
have created process challenges for mortgage
providers and led to frustration for many
mortgage customers.
Our efforts in the mortgage business are
intended to create a less-cumbersome process
for customers that offers transparency and
efficiency and adheres without exception to
the new rules. We have made solid progress,
and when we are satisfied that we have gotten
it right, the mortgage business will be a
catalyst that leads to strong, lasting customer
relationships that offer opportunities for our
other lines of business as well.