September 10, 2007

Mr. Donald A. Walker

Senior Assistant Chief Accountant

United States Securities and Exchange Commission

Division of Corporation Finance

Office of Financial Services

100F Street, N.E.

Washington, D.C. 20549

Form 10-K filed March 1, 2007

Form 10-Q filed August 8, 2007

File No. 001-09718

Dear Mr. Walker:

The PNC Financial Services Group, Inc. (“PNC” or "Company") is responding to your letter dated August 24, 2007 pertaining to your review and comments regarding the Company's Annual Report on Form 10-K for the year ended December 31, 2006 ("Form 10-K") filed March 1, 2007 and the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2007 (“Form 10-Q”) filed August 8, 2007.

We appreciate your comments and insights regarding our recent disclosures. Company management is responsible for establishing and maintaining effective internal control over financial reporting and the adequacy and accuracy of the disclosures in our filings. We acknowledge that SEC Staff ("Staff") comments or changes to disclosures that we make in response to Staff comments do not foreclose the SEC from taking any action with respect to the Form 10-K. In addition, we will not assert Staff comments as a defense in any proceeding initiated by the SEC or any person under the federal securities laws of the United States.

For your convenience, we have included in this letter (in italics) the number and description of each of the comments in your letter and the corresponding responses thereto. All references to page numbers and captions in our responses correspond to the page numbers and captions in the Form 10-K or Form 10-Q, as applicable.

United States Securities and Exchange Commission

Mr. Donald A. Walker, Senior Assistant Chief Accountant

Page 2

Form 10-K for the year ended December 31, 2006

Consolidated Income Statement Review, Provision for Credit Losses, page 24

RESPONSE:

In 2005, total net charge-offs were $30 million and included the effect of a single recovery of $53 million, which increased the allowance for loan and lease losses. Disclosure regarding this recovery was provided in PNC’s 2005 Form 10-K, Provision For Credit Losses, page 23, and in PNC’s 2006 Form 10-K, Provision For Credit Losses, page 24, and the Charge-offs And Recoveries table, page 50. Excluding this item, net charge-offs would have been $83 million for 2005.

In 2006, total net charge-offs were $140 million and included the impact of a single large overdraft resulting from a situation in which a customer defrauded PNC. Our policy is to reclassify deposit overdrafts to the loan portfolio and charge any loss incurred against the allowance for loan and lease losses. The initial amount of the overdraft was $22.6 million, of which we subsequently collected $2.6 million. The uncollected portion of the overdraft resulted in a loss of $20 million which was charged off in 2006. PNC has no collateral related to the overdraft but is pursuing recovery from the customer in litigation and bankruptcy proceedings. Excluding this item, net charge-offs would have been $120 million for 2006.

Excluding the impact of the 2005 recovery and the 2006 overdraft described above, net charge-offs increased by $37 million in the comparison.

The provision for credit losses is a function of the required allowance for loan and lease losses as of the balance sheet date, after giving effect to net charge-offs which reduce previously established reserves. The required allowances for loan and lease losses and unfunded loan commitments and letters of credit at December 31, 2006 reflected an increase in the loan portfolio and unfunded commitments, respectively. These factors and the impact of the recovery and overdraft charge-off resulted in the higher provision for credit losses in 2006 compared with 2005.

United States Securities and Exchange Commission

Mr. Donald A. Walker, Senior Assistant Chief Accountant

Page 3

Form 10-K for the year ended December 31, 2006

Credit Risk Management, Allowance for Loan and Lease Losses and Unfunded Loan Commitments and Letters of Credit, page 49

RESPONSE:

We disclosed on page 50 (third paragraph) of the Form 10-K that the key elements of our pool reserve methodology include Probability of Default, Exposure at Default and Loss Given Default. These inputs to our allowance model are based on historical performance data. However, historical loss experience is only the starting point for the recognition and measurement of collective loan impairment at the balance sheet date. Our analysis of the information and events that occurred prior to the evaluation date considers if it is probable that a loan has been impaired and if the amount of the impairment can be reasonably estimated.

We have a multifaceted governance process around allowance calculations, ensuring independent and objective review. This governance process consists of our Reserve Adequacy Committee (“RAC”) performing this assessment on a quarterly basis based upon updated observable data. RAC reviews the adequacy of the allowance for loan and lease losses for business units and major bank subsidiaries and provides oversight for the allowance evaluation process, including quarterly evaluations as well as methodology and estimation changes. The results of RAC’s evaluations are reported to the Audit Committee of PNC’s Board of Directors.

The allowance represents our best estimate of incurred losses as of the balance sheet date. For example, our rating methodology results in quarterly upgrades or downgrades of loans to reflect the current economic and financial condition of our borrowers. In times of economic stress, increases in incurred losses are sustained, thus resulting in an increase in our allowance for loan and lease losses. As economic conditions and risk ratings improve, the allowance requirement is lowered to reflect the reduction of incurred loss in the portfolio.

The note on page 76 which references “expected default probabilities” should not be interpreted to mean that our allowance reflects “expected loss” over the life of the loan. For reserve purposes, we calculate probable loss inherent in the current portfolio, as of the balance sheet date. This is in sharp contrast to the methodology we use for calculating economic capital, which uses rating migrations to assess unexpected loss. We do not use any such forward-looking migration methodologies in the allowance calculation. We plan to revise the terminology to “probability of default” in future filings.

United States Securities and Exchange Commission

Mr. Donald A. Walker, Senior Assistant Chief Accountant

Page 4

Additionally, the estimated allowance derived by the model (output) is adjusted, if necessary, for the impact of other events which may not be adequately addressed in the model. For example, during changes in the business or economic climate there is a greater risk of model and/or information lag in developing our estimates of incurred loss. Events may also have occurred (e.g., natural disaster, terrorist attacks, etc.) which call into question the relevance of solely relying on historical data in estimating incurred loss in the current environment. In these situations, we may feel it is appropriate to adjust the modeled results for consideration of various factors as outlined in the SEC’s Staff Accounting Bulletin (“SAB”) 102, Selected loan loss allowance methodology and documentation issues, to reflect the incurred loss as of the balance sheet date. The factors we considered in this process are outlined on page 50 (following the Charge-offs And Recoveries table) and Note 1, Accounting Policies, Allowance for Loan and Lease Losses, sixth paragraph.

Our assessment of impairment is based on relevant observable data relating to existing conditions and does not include projected changes in the observable data or qualitative factors that may occur in the future. As such, the allowance for loan and lease losses reflects a reasonable estimate of losses that have been incurred at the balance sheet date but no estimate of losses that might be incurred based upon future possible or even probable events.

United States Securities and Exchange Commission

Mr. Donald A. Walker, Senior Assistant Chief Accountant

Page 5

Form 10-K for the year ended December 31, 2006

Credit Risk Management, Allowance for Loan and Lease Losses and Unfunded Loan Commitments and Letters of Credit, page 49

RESPONSE:

As disclosed on page 50 of our Form 10-K, the following factors influence the provision for credit losses: loan growth, changes in portfolio composition, the impact of refinements to our reserve methodology, and changes in asset quality. The specific changes in the composition of the loan portfolio and other factors in 2006 that contributed to an increase to the provision for credit losses in that year compared with 2005 were as follows:

United States Securities and Exchange Commission

Mr. Donald A. Walker, Senior Assistant Chief Accountant

Page 6

In addition to these loan portfolio changes, the other factors that significantly contributed to the increase in the provision for credit losses in 2006 compared with 2005 were as discussed in our response to comment 1. of this letter. The most significant factor was the substantial recovery in 2005 that was not repeated in 2006.

The statement “Refinements to our reserve methodology” refers to the update of our model input parameters (Probability of Default, Loss Given Default and Exposure at Default). The update usually consists of the addition of one year of current performance data to our historical default and loss database. We revised this phrase to be “Refinements to model parameters” in our Form 10-Q to more clearly reflect this process. Our reserve methodology in 2006 was consistent with that of prior periods.

While asset quality declined marginally during 2006, it remained excellent by PNC historical performance, and we believed that it would not change significantly in the near term.

United States Securities and Exchange Commission

Mr. Donald A. Walker, Senior Assistant Chief Accountant

Page 7

Form 10-K for the year ended December 31, 2006

Note 2, Acquisitions, page 81

RESPONSE:

On August 7, 2006, PNC filed a pre-submission consultation with the SEC’s Office of the Chief Accountant (“OCA”) regarding several accounting issues related to the BlackRock/MLIM transaction and our obligation related to the BlackRock long-term incentive plan (“LTIP”). As requested during our discussions with the staff of the OCA, we provided additional information by letter dated August 25, 2006. On October 6, 2006, we sent a confirming letter to the OCA documenting the various discussions with the staff and conclusions reached. Our responses to your comments are based on the discussions and conclusions reached with the OCA as part of the pre-submission consultation. We copied Ms. Carol Stacy, then Chief Accountant of the Division of Corporation Finance, on each of these letters in 2006. We would be happy to provide copies of these letters to you if that would assist you in your review of our responses that follow.

Based on the interpretation of the applicable accounting guidance, we believed that the commitment to transfer the 4 million shares to BlackRock constituted an obligation that should be recognized as a liability upon closing and deconsolidation of BlackRock.

United States Securities and Exchange Commission

Mr. Donald A. Walker, Senior Assistant Chief Accountant

Page 8

Statement of Financial Accounting Concepts No. 6, Elements of Financial Statements, paragraph 35, defines a liability as a probable future sacrifice of economic benefits arising from a present obligation of a particular entity to transfer assets to another entity or entities in the future as a result of past transactions or events. SFAS 5, Accounting for Contingencies, paragraph 8, states that a liability should be recorded if it is both probable that a liability has been incurred and its amount can be reasonably estimated.

As a result of the BlackRock/MLIM transaction and resulting deconsolidation, we believed our obligation to transfer shares of BlackRock to BlackRock employees was a derivative instrument issued/written by us that was indexed to the stock of an equity method investee of PNC. EITF Issue No. 00-6, Accounting for Freestanding Derivative Instruments Indexed, and Potentially Settled in, the Stock of a Consolidated Subsidiary (“EITF 00-6”), addresses the accounting for freestanding derivative instruments indexed to the stock of a consolidated subsidiary. We believed that the guidance in EITF 00-6 should also have been applied by analogy to freestanding derivative instruments indexed to the stock of an equity method investee.

We also considered guidance in EITF Issue No. 02-8, Accounting for Options Granted to Employees in Unrestricted, Publicly Traded Shares of an Unrelated Entity (“EITF 02-8”). While this guidance addresses the accounting for stock compensation awards issued to employees that are based on the stock of an unrelated entity, we understand that the scope reference in EITF 02-8 to an unrelated entity was included so as to exclude entities within a consolidated group. EITF 02-8 states that the option award of an unrelated entity meets the definition of a derivative in SFAS 133, Accounting for Derivative Instruments and Hedging Activities and, therefore, should be accounted for by the employer as a derivative under that Statement.

Based on the above, the liability should have been recognized at fair value and been remeasured each reporting period with changes recognized in earnings. Since the obligation to transfer BlackRock shares is indexed to the shares of BlackRock rather than shares of PNC, the scope exception provided under SFAS 133, paragraph 11a, does not apply.

While the OCA staff concurred with our position that a liability measured at fair value should be established upon the closing and deconsolidation of BlackRock, the staff did not believe that the related expense should be deferred and amortized over future periods, and that EITF Issue No. 00-12, Accounting by an Investor for Stock-Based Compensation Granted to Employees of an Equity Method Investee, provides no analogous guidance as to attribution or period of benefit. After further discussions with the OCA staff as to alternatives they offered, we selected the alternative to recognize the cost as accruing to the benefit of BlackRock’s other shareholders (i.e., 66 percent) as a charge against the transaction gain. The remainder of the obligation related to PNC’s ownership would be reflected as an increase in our investment in BlackRock. The future expense related to the LTIP program would be recognized by PNC by our recording of our proportionate share of BlackRock’s net income (i.e., equity pick-up). Any changes in the fair value of the obligation in future periods would be an adjustment to current period earnings.

Due to the unusual nature of the BlackRock LTIP obligation and to provide consistency with prior period disclosures regarding LTIP, we elected to provide disclosures as to the obligation and the impact of the mark-to-market change in the obligation in Note 2, Acquisitions, and Note 18, Stock Based Compensation Plans, respectively. In future filings, disclosure regarding the obligation will also be included in our Financial Derivatives Note, with an explanation of the unique nature of the free-standing derivative.

United States Securities and Exchange Commission

Mr. Donald A. Walker, Senior Assistant Chief Accountant

Page 9

Form 10-K for the year ended December 31, 2006

Note 2, Acquisitions, page 81

RESPONSE:

Based on our interpretation of SAB Topic 5-H, we believed that the increase in the book value of our investment in the 4 million shares we committed to transfer to BlackRock employees to satisfy employee incentive awards and for which BlackRock had agreed to buy back from the employees under the initial LTIP program should have been excluded from the gain and instead should have been included directly in equity in the form of additional paid in capital.

SAB Topic 5-H indicates that when a subsidiary or investee issues common stock in exchange for either cash or noncash assets and there are subsequent equity transactions contemplated that raise concerns about the likelihood of realization of the gain, then the gain recognized may be limited. We believed that this guidance was relevant since BlackRock issued approximately 65 million new equity shares for the MLIM transaction. At that time, BlackRock had a commitment to repurchase shares under the initial LTIP program.

SAB Topic 5-H precludes gain recognition if the issuance of shares by a subsidiary is part of a broader corporate reorganization contemplated or planned at the time of issuance of such shares. Question 2 of SAB Topic 5-H states in part:

The staff believes that gain recognition is not appropriate in situations where subsequent capital transactions are contemplated that raise concerns about the likelihood of the registrant realizing that gain, such as where the registrant intends to spin-off its subsidiary to shareholders or where reacquisition of shares is contemplated at the time of issuance. The staff will presume that repurchases were contemplated at the date of issuance in those situations where shares are repurchased within one year of issuance or where a

United States Securities and Exchange Commission

Mr. Donald A. Walker, Senior Assistant Chief Accountant

Page 10

specific plan existed to repurchase shares at the time shares were issued. [Emphasis added]

Therefore, gain recognition related to the 4 million shares was not appropriate based on our commitment to transfer the shares and/or BlackRock’s commitment to buy back up to 4 million shares, regardless of the actual number of shares that may have been bought back. In addition, at the closing of the transaction BlackRock also had an approved plan in place to buy back up to 2.1 million shares separate from the LTIP repurchase commitment. We believed this plan also constituted a plan to repurchase shares that was in place at the time the 65 million new shares were issued in the BlackRock/MLIM transaction. Therefore, these shares were also excluded from the gain calculation. As such, the increase in value of our investment relative to the total 6.1 million shares resulted in a corresponding increase in additional paid in capital of approximately $.3 billion as disclosed on page 81.

Our response is based on our discussions and conclusion reached with the OCA as part of PNC’s 2006 pre-submission consultation. The OCA staff did not object to our position.

United States Securities and Exchange Commission

Mr. Donald A. Walker, Senior Assistant Chief Accountant

Page 11

Form 10-K for the year ended December 31, 2006

Note 16, Financial Derivatives, page 100

RESPONSE:

From a credit risk management perspective, PNC buys and sells credit loss protection via the use of credit derivatives. When PNC buys loss protection by purchasing a credit default swap (“CDS”), it pays a fee to the seller, or CDS counterparty, in return for the right to receive a payment if a specified credit event occurs for a particular obligor (or reference entity). PNC purchases CDSs to mitigate the risk of economic loss on a portion of its loan exposures. For credit protection, PNC uses only traditional credit derivative instruments and does not purchase instruments such as “total return swaps.” PNC participates in single name and loan CDSs. The structure of these transactions would not differ from single name CDSs executed by proprietary trading or convertible bond trading.

United States Securities and Exchange Commission

Mr. Donald A. Walker, Senior Assistant Chief Accountant

Page 12

PNC also sells loss protection: (1) to mitigate the net premium cost and the impact of mark-to-market accounting on the CDS in cases where we buy protection to hedge the loan portfolio; and (2) to take proprietary trading positions, usually as matched pairs (single name vs. index or vice versa). These activities represent additional risk positions rather than hedges of risk.

PNC approves counterparty credit lines for all of our trading activities, including CDSs. We trade credit derivatives with dealers (investment banks or brokers) only and not with customers. Counterparty credit lines are approved based on a review of credit quality in accordance with PNC’s traditional credit quality standards and credit policies. The credit risk of our counterparties is monitored in the normal course of business. Furthermore, all counterparty credit lines are subject to collateral thresholds and exposures above these thresholds are secured.

As a result of PNC’s strong credit culture and commitment to maintaining a moderate risk profile, we have nominal exposure to subprime lending activities and related market implications. Any significant concerns with respect to the subprime lending activities of a particular counterparty would result in a review of our counterparty trading exposure and a potential reduction or cessation of trading with that counterparty. No such actions have been taken by PNC to date.

This proprietary trading utilizes the same counterparty credit lines as our other CDS activities. In addition, the trading activity must conform to exposure limits with respect to individual obligor or reference entity and underlying risk of certain aggregations of obligors or reference entities (i.e., only so many dollars to Moody’s ‘Ba1’ rated obligors). We have value at risk limits as well as credit limits applied to all trading CDSs. These trading positions are what were disclosed on page 115 and were also included as free-standing derivatives in Note 16 on page 100.

PNC has not sold credit default swaps involving loans collateralized by real estate properties that have been affected by significant decreases in fair value.

United States Securities and Exchange Commission

Mr. Donald A. Walker, Senior Assistant Chief Accountant

Page 13

Form 10-K for the year ended December 31, 2006

Note 16, Financial Derivatives, page 100

RESPONSE:

PNC enters into equity derivative contracts with our customers, with other counterparties as part of the risk management of the customer contracts and for proprietary trading purposes. Fair values for these equity contracts reflect the current pricing of the underlying instrument and terms of the contract. Factors that impact the fair values of equity contracts include value of the underlying instrument (such as a stock price), volatility in the value of the underlying instrument, time period of the contract (the longer the time period the greater the value), and the level of interest rates (higher rates generally lower the fair value of the contract). Negative fair values indicate that the pricing of the underlying instrument has moved in the favor of the counterparty.

An example of potential negative value is:

The fair values of the underlying contracts will move as the above factors change in the marketplace. In addition, they may be offset by the movements of the values of the related hedge position.

The increase in the negative values from December 31, 2006 to June 30, 2007 of $37 million can be attributed to the changes in fair values of the existing contracts along with new contracts entered into during 2007. The negative value for new contracts entered into during 2007 and still outstanding as of June 30, 2007 was approximately $19 million.

The fair value of credit derivatives will fluctuate with changes in market conditions as reflected in referenced credit spreads. The negative fair value for outstanding contracts will reverse if held to maturity, with net expense or income limited to the premium paid or received. For trading activities, such gains and losses are only one component of our trading book. For hedging activities, any such gain or loss is viewed in conjunction with the overall hedging strategy.

The decline in the negative fair value from December 31, 2006 to June 30, 2007 can be attributed to a change in market conditions.

United States Securities and Exchange Commission

Mr. Donald A. Walker, Senior Assistant Chief Accountant

Page 14

Form 10-Q for the period ended June 30, 2007

Note 4, Asset Quality, page 51

RESPONSE:

Mercantile represented 19% of both PNC’s allowance for loan and lease losses and total loans, net of unearned income, at June 30, 2007.

One of our strategies for the Mercantile loan portfolio was to sell nonperforming loans subsequent to the closing of the acquisition on March 2, 2007. As part of the acquisition date purchase price allocation, we identified $23 million of Mercantile loans as nonperforming loans and classified them as held for sale rather than retain them in the loan portfolio. The allowance for loan and lease losses associated with these loans was not carried over as part of the purchase price allocation. The remaining portion of the Mercantile allowance for loan and lease losses associated with the performing loan portfolio was retained.

The $67 million of nonperforming assets at June 30, 2007 also did not fall under the scope of SOP 03-3. Subsequent to the acquisition date and prior to June 30, 2007, additional Mercantile loans were placed on nonperforming status as part of the quarterly loan review process. These loans became over 90 days past due, had declines in underlying collateral value or other factors subsequent to the acquisition date that led to the nonperforming designation. Any change in required reserves associated with these nonperforming loans was reflected in the allowance for loan and lease losses at June 30, 2007.

***

United States Securities and Exchange Commission

Mr. Donald A. Walker, Senior Assistant Chief Accountant

Page 15

Our disclosures in the third quarter 2007 Form 10-Q and/or the 2007 Form 10-K will be enhanced, as appropriate, to reflect the additional information discussed above.

We thank you in advance for your prompt attention to this response and look forward to hearing from you at your earliest convenience. Please direct any questions regarding the Company's response to Sam Patterson, Controller, at 412-762-3900.

Sincerely,