Pnc Financial Services Group, Inc. (the) · NYSE:PNC
Pnc Financial Services Group, Inc. (the) — Merrill Lynch Banking & Financial Services Investor Conference 2005
35 slides from Pnc Financial Services Group, Inc. (the)'s conference presentation, Nov 17, 2005
Slide 1: Merrill Lynch Banking & Financial Services Investor Conference
The PNC Financial Services Group, Inc. Merrill Lynch Banking & Financial Services Investor Conference New York, NY November 17, 2005 The PNC Financial Services Group, Inc. Merrill Lynch Banking & Financial Services Investor Conference New York, NY November 17, 2005 EXHIBIT 99.1
Slide 2: Cautionary Statement Regarding Forward-Looking Information
Cautionary Statement Regarding Forward-Looking Information Cautionary Statement Regarding Forward-Looking Information This presentation contains forward-looking statements regarding our outlook or expectations relating to PNC’s future business, operations, financial condition, financial performance
Slide 3: Keys to Success in the Current Environment
Keys to Success in the Current Environment Keys to Success in the Current Environment A Solid Platform Diversified business mix Strong risk management Executable Growth Strategies Invest in and grow fee-based businesses Continue to grow low-cost deposit franchise Generate value-added loans Increase
Slide 4: Building a Sustainable Model
Building a Sustainable Model Building a Sustainable Model
Slide 5: PNC – A Diversified Financial Services Company
Regional, National and International Businesses PNC – A Diversified Financial Services Company IN OH PA KY Business Leadership VA DC MD International fund processing: PFPC – with offices in U.S., Ireland & Luxembourg International investment management: BlackRock – with offices in U.S., Scotland, Ho
Slide 6: Built a Strong Credit Risk Profile
Built a Strong Credit Risk Profile PNC Compares Favorably to Banks Rated One Level Higher and Peer Group Built a Strong Credit Risk Profile Nonperforming assets to loans, loans held for sale and foreclosed assets 0.29% 0.55% 0.42% Nonperforming loans to loans 0.25% 0.49% 0.36% Net charge-offs to ave
Slide 7: 2005 Highlights
2005 Highlights Financial Highlights 2005 Highlights Strong client activity – business segment earnings* grew 19% year over year for nine months Riggs successfully integrated Strong revenue growth Loans and deposits continued to grow Recent acquisitions represent new opportunities for growth Efficie
Slide 8: Keys to Success in the Current Environment
Keys to Success in the Current Environment Keys to Success in the Current Environment A Solid Platform Diversified business mix Strong risk management Executable Growth Strategies Invest in and grow fee-based businesses Continue to grow low-cost deposit franchise Generate value-added loans Increase
Slide 9: Fee-Based Businesses Differentiate PNC
Fee-Based Businesses Differentiate PNC Noninterest Income to Total Revenue Strong Noninterest Income Growth Fee-Based Businesses Differentiate PNC 0% 10% 20% 30% 40% 50% 60% 70% 80% BK PNC WB USB FITB WFC KEY STI BBT NCC Information for the quarter ended 9/30/05 PNC amounts calculated in the Appendi
Slide 10: BlackRock – A Growth Engine
BlackRock – A Growth Engine Assets Under Management Earnings Reflects adjusted earnings for 2004, nine months 2004 and nine months 2005 as presented in BlackRock’s publicly available filings and are reconciled to GAAP in the Appendix BlackRock – A Growth Engine $0 $50 $100 $150 $200 2002 2003 2004 2
Slide 11: PFPC – Strong Growth
PFPC – Strong Growth Servicing Statistics Strategies to Drive Growth Improve efficiency Expand offshore Invest in and grow alternative investment products PFPC – Strong Growth Assets serviced ($ billions) Accounting / administration $793 +19% Domestic $726 +19% Offshore $67 +16% Shareholder accounts
Slide 12: Banking – Growing Fee Income
Banking – Growing Fee Income Strong Noninterest Income Growth Strategies to Drive Growth $0 $175 $350 $525 $700 $875 $1,050 $1,225 $1,400 2004 2005 Nine Months Ended September 30 Banking – Growing Fee Income $908 $373 $426 $937 +3% +14% Consumer Banking Institutional Banking * • Institutional Bankin
Slide 13: Keys to Success in the Current Environment
Keys to Success in the Current Environment Keys to Success in the Current Environment A Solid Platform Diversified business mix Strong risk management Executable Growth Strategies Invest in and grow fee-based businesses Continue to grow low-cost deposit franchise Generate value-added loans Increase
Slide 14: Increasing and Deepening Checking Relationships
Increasing and Deepening Checking Relationships 0.0 0.5 1.0 1.5 2.0 2002 2003 2004 9/30/05 Increasing and Deepening Checking Relationships …Provides Opportunities for Deepening Relationships Home equity loans +17% Consumer on-line banking users +19% Consumer on-line bill-pay users +72% Growth* * Gro
Slide 15: Growing a Valuable Core Deposit Base
Growing a Valuable Core Deposit Base Relationship Strategy Generating Deposit Growth $5 $7 $9 $11 $13 $15 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% $5 $7 $9 $11 $13 $15 $17 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q Growing a Valuable Core Deposit Base $ billions Consumer Banking Av
Slide 16: Noninterest-Bearing Deposits Becoming More Valuable
Noninterest-Bearing Deposits Becoming More Valuable PNC’s High Percentage of Noninterest-Bearing Funding Rising Interest Rates Increase Value of PNC’s Noninterest-Bearing Deposits 12% 14% 16% 18% 20% 22% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% 1Q 2Q 3Q 4Q 1Q 2Q 3Q Noninterest-Bearin
Slide 17: Keys to Success in the Current Environment
Keys to Success in the Current Environment Keys to Success in the Current Environment A Solid Platform Diversified business mix Strong risk management Executable Growth Strategies Invest in and grow fee-based businesses Continue to grow low-cost deposit franchise Generate value-added loans Increase
Slide 18: Improving Execution Driving Loan Growth
PNC Average Institutional and Business Banking Loans Improving Execution Driving Loan Growth $0 $5 $10 $15 $20 $25 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 * Includes lease financing and excludes Market Street Funding Corporation; see Appendix for GAAP reconciliation $ billions Commercial Real Estate
Slide 19: Keys to Success in the Current Environment
Keys to Success in the Current Environment Keys to Success in the Current Environment A Solid Platform Diversified business mix Strong risk management Executable Growth Strategies Invest in and grow fee-based businesses Continue to grow low-cost deposit franchise Generate value-added loans Increase
Slide 20: An Opportunity to Increase Securities Yields
An Opportunity to Increase Securities Yields Retained Portfolio Flexibility Increasing Yields on Securities Portfolio An Opportunity to Increase Securities Yields Yield on Securities Portfolio BK 4.27 % 3.52 % +75bp PNC 4.29 3.67 +62bp STI 4.40 3.82 +58bp USB 4.73 4.28 +45bp WB 5.07 4.75 +32bp WFC 5
Slide 21: Net Interest Income Trend Improving
Net Interest Income Trend Improving Consolidated Net Interest Income (Taxable Equivalent Basis) $450 $470 $490 $510 $530 $550 $570 $590 $610 Net Interest Income Trend Improving Net interest income on a taxable-equivalent basis is reconciled to GAAP net interest income in Appendix $ millions 2002 200
Slide 22: Keys to Success in the Current Environment
Keys to Success in the Current Environment Keys to Success in the Current Environment A Solid Platform Diversified business mix Strong risk management Executable Growth Strategies Invest in and grow fee-based businesses Continue to grow low-cost deposit franchise Generate value-added loans Increase
Slide 23: One PNC – Driving Improved Operating Leverage
One PNC – Driving Improved Operating Leverage One PNC – Driving Improved Operating Leverage Eliminate 3,000 positions Implement 2,400 ideas Achieve $400 million of total value 1,800 positions eliminated 77% of ideas are complete or in process On track to capture $400 million of value by 2007 Expecte
Slide 24: Summary
Summary Summary Already accomplished a great deal in 2005 Positioned to generate positive operating leverage – Expect overall revenue growth trends to continue – One PNC initiative to drive efficiency improvements
Slide 25: © PNC
© PNC
Slide 26: Appendix
Appendix
Slide 27: Cautionary Statement Regarding Forward-Looking Information
Cautionary Statement Regarding Forward-Looking Information Cautionary Statement Regarding Forward-Looking Information We make statements in this presentation, and we may from time to time make other statements, regarding our outlook or expectations for earnings, revenues, expenses and/or other matte
Slide 28: Cautionary Statement Regarding Forward-Looking Information (continued)
Cautionary Statement Regarding Forward-Looking Information (continued) Cautionary Statement Regarding Forward-Looking Information (continued) • customer acceptance of our products and services, and our customers’ borrowing, repayment, investment and deposit practices; • the impact on us of changes i
Slide 29: Cautionary Statement Regarding Forward-Looking Information (continued)
Cautionary Statement Regarding Forward-Looking Information (continued) Cautionary Statement Regarding Forward-Looking Information (continued) pursuit of attractive acquisition opportunities could be negatively impacted due to regulatory delays or other regulatory issues. Regulatory and/or legal issu
Slide 30: Non-GAAP to GAAP Reconcilement: Business Earnings and Return on Capital
Non-GAAP to GAAP Reconcilement Appendix Business Earnings and Return on Capital Non-GAAP to GAAP Reconcilement Business segments Consumer Banking $487 $443 23% Institutional Banking 29% BlackRock 25% PFPC 34% Total business segments 1,095 19% 26% Minority interest in (income) of BlackRock (49) (27)
Slide 31: Non-GAAP to GAAP Reconcilement: Noninterest Income to Total Revenue
Non-GAAP to GAAP Reconcilement Appendix Noninterest Income to Total Revenue* Non-GAAP to GAAP Reconcilement BlackRock $301 18.0% PFPC 13.0 Banking businesses 29.2 Other 6.4 Total consolidated $1,113 $1,672 66.6% Noninterest Income $ millions Consolidated Total Revenue Noninterest Income to Consolida
Slide 32: Non-GAAP to GAAP Reconcilement: BlackRock Adjusted Earnings
Non-GAAP to GAAP Reconcilement Appendix BlackRock Adjusted Earnings Non-GAAP to GAAP Reconcilement $ millions
Slide 33: Non-GAAP to GAAP Reconcilement: Average Institutional and Business Banking Loans
Non-GAAP to GAAP Reconcilement Appendix PNC Average Institutional and Business Banking Loans Non-GAAP to GAAP Reconcilement Business Banking $2,968 $3,179 $3,629 $3,825 $3,918 $4,052 $4,277 $4,443 26% Institutional Banking Asset based lending 3,658 3,608 3,788 3,838 3,976 4,050 4,303 4,227 9% Commer
Slide 34: Non-GAAP to GAAP Reconcilement: Consolidated Net Interest Income
Non-GAAP to GAAP Reconcilement Appendix Consolidated Net Interest Income Non-GAAP to GAAP Reconcilement Net interest income, GAAP basis $590 $555 $528 $524 Taxable-equivalent adjustment Net interest income, taxable - equivalent basis $593 $558 $532 $527 $ millions 1Q02 3Q02 2Q02 4Q02 Net interest in
Slide 35: Peer Groups
Peer Groups Appendix Peer Groups BB&T Corporation BBT The Bank of New York Company, Inc. BK Fifth Third Bancorp FITB KeyCorp KEY National City Corporation NCC The PNC Financial Services Group, Inc. PNC SunTrust Banks, Inc. STI U.S. Bancorp USB Wachovia Corporation WB Wells Fargo & Company WFC Marsha