PNC to Sell PNC Global Investment Servicing

PITTSBURGH, Feb. 2 /PRNewswire-FirstCall/ -- The PNC Financial Services Group, Inc. (NYSE: PNC) today announced that it has signed a definitive agreement to sell PNC Global Investment Servicing Inc., a leading provider of processing, technology and business intelligence services to asset managers, broker-dealers, and financial advisors worldwide, to BNY Mellon (NYSE: BK) for $2.3 billion in cash.

Upon completion of the sale, PNC expects to report an after-tax gain of approximately $.5 billion and an increase in Tier 1 common capital of approximately $1.6 billion after the release of capital of $1.1 billion primarily related to goodwill and other intangible assets. As a result, on a pro forma basis, PNC's Tier 1 common capital ratio at December 31, 2009 would have increased by approximately 70 basis points to an estimated 6.7 percent.

"The sale of PNC Global Investment Servicing is consistent with our focus on disciplined capital management," said James E. Rohr, chairman and chief executive officer. "Given the changing competitive landscape in the investment servicing industry, we believe this is the proper time to sell the business to capture the full value of PNC Global Investment Servicing. The capital generated from this transaction will position PNC with further flexibility."

The transaction is estimated to be completed in the third quarter of 2010, subject to regulatory approvals and certain other closing conditions.

"For more than three decades the work of PNC Global Investment Servicing's dedicated employees has grown the business into a premier provider of fund servicing around the globe," Rohr continued. "We are pleased that this transaction partners PNC Global Investment Servicing's clients and employees with an industry leader."

PNC Global Investment Servicing serviced total fund assets of $2.3 trillion and had 4,450 full-time employees at December 31, 2009.

Citigroup Global Markets Inc. and Morgan Stanley & Co. Incorporated acted as financial advisers and Wachtell, Lipton, Rosen & Katz acted as legal adviser to PNC.

The PNC Financial Services Group, Inc. (www.pnc.com) is one of the nation's largest diversified financial services organizations providing retail and business banking; residential mortgage banking; specialized services for corporations and government entities, including corporate banking, real estate finance and asset-based lending; wealth management; asset management and global fund services.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

We make statements in this news release, and we may from time to time make other statements, regarding our outlook or expectations for earnings, revenues, expenses, capital levels, liquidity levels, asset quality and/or other matters regarding or affecting PNC that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act.  Forward-looking statements are typically identified by words such as "believe," "plan," "expect," "anticipate," "intend," "outlook," "estimate," "forecast," "will," "project" and other similar words and expressions.  Forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time.

Forward-looking statements speak only as of the date they are made. We do not assume any duty and do not undertake to update our forward-looking statements.  Actual results or future events could differ, possibly materially, from those that we anticipated in our forward-looking statements, and future results could differ materially from our historical performance.

Our forward-looking statements are subject to the following principal risks and uncertainties.  We provide greater detail regarding some of these factors in our 2008 Form 10-K and 2009 Form 10Qs, including in the Risk Factors and Risk Management sections of those reports, and in our other SEC filings.  Our forward-looking statements may also be subject to other risks and uncertainties, including those that we may discuss elsewhere in this news release or in our filings with the SEC, accessible on the SEC's website at www.sec.gov and on or through our corporate website at www.pnc.com/secfilings.  We have included these web addresses as inactive textual references only.  Information on these websites is not part of this document.

    --  Our businesses and financial results are affected by business and
        economic conditions, both generally and specifically in the principal
        markets in which we operate. In particular, our businesses and financial
        results may be impacted by:
            --  Changes in interest rates and valuations in the debt, equity and
                other financial markets.
            --  Disruptions in the liquidity and other functioning of financial
                markets, including such disruptions in the markets for real
                estate and other assets commonly securing financial products.
            --  Actions by the Federal Reserve and other government agencies,
                including those that impact money supply and market interest
                rates.
            --  Changes in our customers', suppliers' and other counterparties'
                performance in general and their creditworthiness in particular.
            --  Changes in levels of unemployment.
            --  Changes in customer preferences and behavior, whether as a
                result of changing business and economic conditions or other
                factors.
    --  A continuation of recent turbulence in significant portions of the US
        and global financial markets, particularly if it worsens, could impact
        our performance, both directly by affecting our revenues and the value
        of our assets and liabilities and indirectly by affecting our
        counterparties and the economy generally.
    --  Our business and financial performance could be impacted as the
        financial industry restructures in the current environment, both by
        changes in the creditworthiness and performance of our counterparties
        and by changes in the competitive and regulatory landscape.
    --  Given current economic and financial market conditions, our
        forward-looking financial statements are subject to the risk that these
        conditions will be substantially different than we are currently
        expecting. These statements are based on our current expectations that
        interest rates will remain low in the first half of 2010 but will move
        upward in the second half of the year and our view that the modest
        economic recovery that began last year will extend through 2010.
    --  Legal and regulatory developments could have an impact on our ability to
        operate our businesses or our financial condition or results of
        operations or our competitive position or reputation. Reputational
        impacts, in turn, could affect matters such as business generation and
        retention, our ability to attract and retain management, liquidity, and
        funding. These legal and regulatory developments could include:
            --  Changes resulting from legislative and regulatory responses to
                the current economic and financial industry environment,
                including current and future conditions or restrictions imposed
                as a result of our participation in the TARP Capital Purchase
                Program.
            --  Other legislative and regulatory reforms, including broad-based
                restructuring of financial industry regulation as well as
                changes to laws and regulations involving tax, pension,
                bankruptcy, consumer protection, and other aspects of the
                financial institution industry.
            --  Increased litigation risk from recent regulatory and other
                governmental developments.
            --  Unfavorable resolution of legal proceedings or other claims and
                regulatory and other governmental inquiries.
            --  The results of the regulatory examination and supervision
                process, including our failure to satisfy the requirements of
                agreements with governmental agencies.
            --  Changes in accounting policies and principles; and
            --  Changes to regulations governing bank capital, including as a
                result of the so-called "Basel 3" initiative.
    --  Our issuance of securities to the US Department of the Treasury may
        limit our ability to return capital to our shareholders and is dilutive
        to our common shares. If we are unable previously to redeem the shares,
        the dividend rate increases substantially after five years.
    --  Our business and operating results are affected by our ability to
        identify and effectively manage risks inherent in our businesses,
        including, where appropriate, through the effective use of third-party
        insurance, derivatives, and capital management techniques, and by our
        ability to meet evolving regulatory capital standards.
    --  The adequacy of our intellectual property protection, and the extent of
        any costs associated with obtaining rights in intellectual property
        claimed by others, can impact our business and operating results.
    --  Our ability to anticipate and respond to technological changes can have
        an impact on our ability to respond to customer needs and to meet
        competitive demands.
    --  Our ability to implement our business initiatives and strategies could
        affect our financial performance over the next several years.
    --  Competition can have an impact on customer acquisition, growth and
        retention, as well as on our credit spreads and product pricing, which
        can affect market share, deposits and revenues.
    --  Our business and operating results can also be affected by widespread
        natural disasters, terrorist activities or international hostilities,
        either as a result of the impact on the economy and capital and other
        financial markets generally or on us or on our customers, suppliers or
        other counterparties specifically.
    --  Also, risks and uncertainties that could affect the results anticipated
        in forward-looking statements or from historical performance relating to
        our equity interest in BlackRock, Inc. are discussed in more detail in
        BlackRock's filings with the SEC, including in the Risk Factors sections
        of BlackRock's reports. BlackRock's SEC filings are accessible on the
        SEC's website and on or through BlackRock's website at
        www.blackrock.com. This material is referenced for informational
        purposes only and should not be deemed to constitute a part of this
        document.

In addition, our acquisition of National City Corporation ("National City") on December 31, 2008 presents us with a number of risks and uncertainties related both to the acquisition itself and to the integration of the acquired businesses into PNC.  These risks and uncertainties include the following:

    --  The anticipated benefits of the transaction, including anticipated cost
        savings and strategic gains, may be significantly harder or take longer
        to achieve than expected or may not be achieved in their entirety as a
        result of unexpected factors or events.
    --  Our ability to achieve anticipated results from this transaction is
        dependent on the state going forward of the economic and financial
        markets, which have been under significant stress recently.
        Specifically, we may incur more credit losses from National City's loan
        portfolio than expected. Other issues related to achieving anticipated
        financial results include the possibility that deposit attrition or
        attrition in key client, partner and other relationships may be greater
        than expected.
    --  Legal proceedings or other claims made and governmental investigations
        currently pending against National City, as well as others that may be
        filed, made or commenced relating to National City's business and
        activities before the acquisition, could adversely impact our financial
        results.
    --  Our ability to achieve anticipated results is also dependent on our
        ability to bring National City's systems, operating models, and controls
        into conformity with ours and to do so on our planned time schedule. The
        integration of National City's business and operations into PNC, which
        includes conversion of National City's different systems and procedures,
        may take longer than anticipated or be more costly than anticipated or
        have unanticipated adverse results relating to National City's or PNC's
        existing businesses. PNC's ability to integrate National City
        successfully may be adversely affected by the fact that this transaction
        has resulted in PNC entering several markets where PNC did not
        previously have any meaningful retail presence.

In addition to the National City transaction, we grow our business from time to time by acquiring other financial services companies.  Acquisitions in general present us with risks, in addition to those presented by the nature of the business acquired, similar to some or all of those described above relating to the National City acquisition.

CONTACTS:



MEDIA:

Brian E. Goerke

(412) 762-4550

corporate.communications@pnc.com



INVESTORS:

William H. Callihan

(412) 762-8257

investor.relations@pnc.com

SOURCE The PNC Financial Services Group, Inc.