PNC Bank 2015 Annual Report Download - page 119

forecast regulatory capital ratios, and to take actions (such
as capital distributions) based on actual or forecasted
capital ratios, will be dependent at least in part on the
development, validation and regulatory approval of
related models.
• Legal and regulatory developments could have an impact
on our ability to operate our businesses, financial
condition, results of operations, competitive position,
reputation, or pursuit of attractive acquisition
opportunities. Reputational impacts could affect matters
such as business generation and retention, liquidity,
funding, and ability to attract and retain management.
These developments could include:
– Changes resulting from legislative and regulatory
reforms, including major reform of the regulatory
oversight structure of the financial services industry
and changes to laws and regulations involving tax,
pension, bankruptcy, consumer protection, and other
industry aspects, and changes in accounting policies
and principles. We will be impacted by extensive
reforms provided for in the Dodd-Frank Act and
otherwise growing out of the most recent financial
crisis, the precise nature, extent and timing of which,
and their impact on us, remains uncertain.
– Changes to regulations governing bank capital and
liquidity standards, including due to the Dodd-Frank
Act and to Basel-related initiatives.
– Unfavorable resolution of legal proceedings or other
claims and regulatory and other governmental
investigations or other inquiries. In addition to
matters relating to PNC’s current and historical
business and activities, such matters may include
proceedings, claims, investigations, or inquiries
relating to pre-acquisition business and activities of
acquired companies, such as National City. These
matters may result in monetary judgments or
settlements or other remedies, including fines,
penalties, restitution or alterations in our business
practices, and in additional expenses and collateral
costs, and may cause reputational harm to PNC.
– Results of the regulatory examination and
supervision process, including our failure to satisfy
requirements of agreements with governmental
agencies.
– Impact on business and operating results of any costs
associated with obtaining rights in intellectual
property claimed by others and of adequacy of our
intellectual property protection in general.
• Business and operating results are affected by our ability
to identify and effectively manage risks inherent in our
businesses, including, where appropriate, through
effective use of third-party insurance, derivatives, and
capital management techniques, and to meet evolving
regulatory capital and liquidity standards. In particular,
our results currently depend on our ability to manage
elevated levels of impaired assets.
• Business and operating results also include impacts
relating to our equity interest in BlackRock, Inc. and rely
to a significant extent on information provided to us by
BlackRock. Risks and uncertainties that could affect
BlackRock are discussed in more detail by BlackRock in
its SEC filings.
• We grow our business in part by acquiring from time to
time other financial services companies, financial services
assets and related deposits and other liabilities.
Acquisition risks and uncertainties include those
presented by the nature of the business acquired,
including in some cases those associated with our entry
into new businesses or new geographic or other markets
and risks resulting from our inexperience in those new
areas, as well as risks and uncertainties related to the
acquisition transactions themselves, regulatory issues, and
the integration of the acquired businesses into PNC after
closing.
• Competition can have an impact on customer acquisition,
growth and retention and on credit spreads and product
pricing, which can affect market share, deposits and
revenues. Industry restructuring in the current
environment could also impact our business and financial
performance through changes in counterparty
creditworthiness and performance and in the competitive
and regulatory landscape. Our ability to anticipate and
respond to technological changes can also impact our
ability to respond to customer needs and meet competitive
demands.
• Business and operating results can also be affected by
widespread natural and other disasters, pandemics,
dislocations, terrorist activities, cyberattacks or
international hostilities through impacts on the economy
and financial markets generally or on us or our
counterparties specifically.
We provide greater detail regarding these as well as other
factors elsewhere in this Report, including in the Risk Factors
and Risk Management sections and the Legal Proceedings and
Commitments and Guarantees Notes of the Notes To
Consolidated Financial Statements in this Report. Our
forward-looking statements may also be subject to other risks
and uncertainties, including those discussed elsewhere in this
Report or in our other filings with the SEC.
ITEM 7A – QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT
MARKET RISK
This information is set forth in the Risk Management section
of Item 7 and in Note 1 Accounting Policies, Note 7 Fair
Value, and Note 14 Financial Derivatives in the Notes To
Consolidated Financial Statements in Item 8 of this Report.
The PNC Financial Services Group, Inc. – Form 10-K 101