PNC Bank 2015 Annual Report Download - page 52

ITEM 7 – MANAGEMENT’S DISCUSSION
AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF
OPERATIONS (MD&A)
E XECUTIVE S UMMARY
Key Strategic Goals
At PNC we manage our company for the long term. We are
focused on the fundamentals of growing customers, loans,
deposits and fee revenue and improving profitability, while
investing for the future and managing risk, expenses and
capital. We continue to invest in our products, markets and
brand, and embrace our corporate responsibility to the
communities where we do business.
We strive to expand and deepen customer relationships by
offering a broad range of deposit, fee-based and credit
products and services. We are focused on delivering those
products and services where, when and how our customers
choose with the goal of offering insight that addresses their
specific financial objectives. Our approach is concentrated on
organically growing and deepening client relationships that
meet our risk/return measures. Our strategies for growing fee
income across our lines of business are focused on achieving
deeper market penetration and cross selling our diverse
product mix to meet the broad range of financial needs of our
customers.
Our strategic priorities are designed to enhance value over the
long term. A key priority is to build a leading banking
franchise in our underpenetrated geographic markets. In
addition, we are seeking to attract more of the investable
assets of new and existing clients. PNC is focused on
redefining the retail banking experience by transforming to a
more customer-centric and sustainable model while lowering
delivery costs as customer banking preferences evolve.
Additionally, we continue to focus on expense management
while investing in technology to bolster critical business
infrastructure and streamline core processes.
Our capital priorities are to support client growth and business
investment, maintain appropriate capital in light of economic
conditions and the Basel III framework and return excess
capital to shareholders, in accordance with the capital plan
included in the current Comprehensive Capital Analysis and
Review (CCAR) submission to the Board of Governors of the
Federal Reserve System (Federal Reserve). New regulatory
short-term liquidity standards became effective for PNC and
PNC Bank, National Association (PNC Bank) beginning
January 1, 2015. For more detail, see the Balance Sheet,
Liquidity and Capital Highlights portion of this Executive
Summary, the Capital portion of the Consolidated Balance
Sheet Review section and the Liquidity Risk Management
portion of the Risk Management section of this Item 7 and the
Supervision and Regulation section in Item 1 Business of this
Report.
Key Factors Affecting Financial Performance
PNC faces a variety of risks that may impact various aspects
of our risk profile from time to time. The extent of such
impacts may vary depending on factors such as the current
economic, political and regulatory environment, merger and
acquisition activity and operational challenges. Many of these
risks and our risk management strategies are described in
more detail elsewhere in this Report.
Our financial performance is substantially affected by a
number of external factors outside of our control, including
the following:
• Domestic and global economic conditions, including
the continuity, speed and stamina of the current U.S.
economic expansion in general and its impact on our
customers in particular;
• The monetary policy actions and statements of the
Federal Reserve and the Federal Open Market
Committee (FOMC);
• The level of, and direction, timing and magnitude of
movement in, interest rates and the shape of the
interest rate yield curve;
• The functioning and other performance of, and
availability of liquidity in, the capital and other
financial markets;
• Changes in the competitive and regulatory landscape
and in counterparty creditworthiness and
performance as the financial services industry
restructures in the current environment;
• The impact of the extensive reforms enacted by the
Dodd-Frank legislation and other legislative,
regulatory and administrative initiatives and actions,
including those outlined elsewhere in this Report and
in subsequent filings with the SEC;
• The impact of market credit spreads on asset
valuations;
• Loan demand, utilization of credit commitments and
standby letters of credit, and asset quality; and
• Customer demand for non-loan products and
services.
In addition, our success will depend upon, among other things:
• Focused execution of our strategic priorities and
achieving targeted outcomes, including our ability to:
• Build a leading banking franchise in our
underpenetrated geographic markets;
• Grow profitability through the acquisition and
retention of customers and deepening
relationships that meet our risk/return
measures;
• Increase revenue from fee income and provide
innovative and valued products and services to
our customers;
34 The PNC Financial Services Group, Inc. – Form 10-K