Prudential 2002 Annual Report Download - page 5

Prudential Financial 2002 Annual Report 3
Our asset management business in Japan now
manages most of the assets for our two insurance
businesses in that country. That makes us the No. 1
U.S.-based institutional asset manager in Japan.
In other key markets, our business in Mexico grew
through the acquisition of a mutual fund company and
a 50 percent stake in one of the country’s most competi-
tive private pension firms. We also
entered into joint ventures with
premier banking partners in Italy
and Germany. These moves have
strengthened our international asset
management growth platform.
We restructured our private
client business overseas. We
consolidated our Latin American
private client operations and our
European institutional equity sales
and trading with their counterparts
in the United States. We exited the
European retail securities broker-
age business. We’re continuing our
private client businesses in markets
where we believe we can grow,
such as the United Kingdom,
Switzerland and Asia, and we’re
moving out of those markets where
our growth prospects are limited.
Continuing the momentum
Early in 2003, we announced that
we are combining our retail securities brokerage and
clearing operations with those of Wachovia
Corporation, creating the third-largest brokerage firm
in the country based on revenues. The new company
will have the scale needed to compete in a consolidat-
ing market, offer a more robust wealth management
platform to meet the investment needs of our clients
through every stage of their lives and enhance the
distribution capability of our product manufacturers.
This, combined with the aggressive actions we have
taken to reduce our expense levels, the smart acquisi-
tions we have made both domestically and
internationally, the steps that we have undertaken to
deliver higher levels of recurring revenue and our
focus on effective capital redeployment are helping to
ensure that we stay on track to our goal of achieving
12 percent return on equity by 2005.(1)
Raising our return on equity is, of course, also
dependent on many factors beyond our control. Chief
among them is performance of the financial markets.
Our plans assume that market conditions will be
consistent with long-term historical norms, although
our goal is to build our businesses to sustain prof-
itability even in uncertain times.
I’m proud of the performance our company deliv-
ered in 2002. We were able to build momentum in
what was clearly a difficult envi-
ronment. More importantly, we
were able to strengthen the
company’s long-term prospects
for growth. We’re in attractive
markets. We’re competitive. We
have scale. We have diversified
earnings. We have an enviable
growth story in our international
business. We have a strong and
increasingly global brand name. We
have a strategy of growth and
protection that resonates now
more than ever. And we have
54,000 talented and dedicated
employees focused on our success.
We are committed to continuing
that momentum this year, next
year and every year because we
know you, our shareholders,
expect nothing less. We are
committed to managing Prudential
Financial as a company that deliv-
ers ongoing growth, profitability
and shareholder value. We are committed to taking
appropriate risks, dealing decisively with poorly
performing businesses and cutting costs intelligently.
We are committed to doing the things that have made
Prudential successful for 127 years: offering the prod-
ucts that best meet the needs of our clients; delivering
outstanding service; providing sound, meaningful
advice; and helping people around the world grow
and protect their wealth. Above all, we are committed
to delivering on the promises we make to our
customers.
I’m excited about our prospects for 2003 and
beyond.
ARTHUR F. RYAN
Chairman and Chief Executive Officer
(1) See footnote on page 16.
“We are committed
to managing
Prudential Financial
as a company
that delivers ongoing
growth, profitability
and shareholder value.”