PNC is a wide group of banking networks having a wide range of customer base. PNC is providing a wide range of services from individual persons to corporations and businesses of a different kind. PNC ensures that needs of its customers are handled desirably. This Company has different types of baking facilities, the one is known as the Retail banking, and the other is called Corporate and institutional banking. The retail banking is recognized as one of the central core features of the PNC group, and the bank provides various services to its wide range of customers through branches, online, customer care, ATMs, mobile banking and other facilities. The subsidiaries, ATMs and solution centers of PNC are located in Midatlantic, Midwest, and Southeast. When customers have to buy home, plan for saving of their retirement money for the investment purposes or finding the right credit card according to the needs of the customer, PNC helps customers to gain confidence by making them right financial investment decisions.
Corporate and institutional banking provides lending credit to middle-market companies where they offer different kinds of loan services for its valuable customers; the bank is recognized as one of the top 5 banks to provide the lending services. Nation largest competitors benefit from the in-depth industry knowledge of the PNC financial group (Financial News, 2011). The right capital and investment decisions are made through this banking network by a different range of competitors.
Section 1: Research Overview
This section of the evaluation explains the introduction of the Research paper on which the assessment is based. The research paper is all about the PNC Financial group which is a banking network having variety of operations for its wide range of customer base. The bank is seen to fail in the tenure from 2007-2009 where an emergency is created where the bank has participated in emergency economic stabilization act which was accepted by congress as bailout measure. There will be a discussion on the competitive environment in which the bank is operating, PNC is a large group with various branches across US, and the company has said to have a broad base of customers who are using different services provided by the banking channel of PNC group. The competitive environment of the banking industry is always very high, where there are different kinds of other banks available for the customers to avail their services (Dwyer & Tkac, 2009).
The research design of all paper will explain the fact of the financial crisis in 2008 of all banking sectors. The design will depict all facts that caused the crisis and damage to the economy. The data was collected from different research journals and article. These data then were analyzed to get information and use this information to get the real fact of the financial crisis in 2008. Notably, switching to other banking channel is one of the easiest things for a customer to consider when unhappy with the services provided by the banking channel. Therefore PNC has to innovate its product range from time to time as different new online facilities and services are available to customers so they may not switch to the other competitor of the PNC group.
The technology is updated nowadays, so customers tend to have more focus on the comfort of the services they receive from the bank on their mobile phone. The company has to introduce new apps to be used by the customers so they can make payments and buy different online products comfortably without having to visit the bank for these kinds of services (Financial News, 2011). Investment point of view all these laws should be explained in this research paper with their pros and cons, the method used to collect data for all these laws and regulations is from different sources to generate and compile data and to use that data in the evaluation process (Ivashina & Scharfstein, 2010). The data obtained should be from a reliable source, so the evaluation is prepared on factual basis of data if the data contained is outdated, or not up to the mark then this will have an impact on the assessment of the research paper. The research paper evaluation is based on the factual findings and should not be based on hypothetical assumptions; all these points should be analyzed before making to start the evaluation process.
Section 2: Brief Discussion of the Firm
The principle services of the bank is to provide banking facilities to its variety of customers, as PLC is a large group of the company, so it has many locations and branches operating across US. The principle services of the company are lending to customers and new businesses as well as making the best investment decision plans for its variety of customers. Additionally, it provides credit card facilities to its wide range of customers, offers different online services for customers to operate their account and access to customers account from mobile phones and many other different kinds of principle services offered by the PNC group.
The company has care centers, ATMs and other mobile online solutions for its customer; the company has also gained a reputation in the target market where different types of competitors interact with PNC group. The group also offers asset management services to its wealthy customer, customers with variety of assets and want to earn a suitable return from those assets can take best investment decisions from the bank to maximize their return on the investment they can make from their assets (Campello et al., 2010). The bank also provides investment and return services to its customers where the customers can earn a suitable return from the investment they make in the bank. The technology is updated nowadays, so customers tend to have more focus on the comfort of the services they receive from the bank on their mobile phone.
The company has to introduce new apps to be used by the customers so they can make payments and buy different online products easily without having to visit the bank for these kinds of services. The bank will provide them a suitable return from the investment of customers; on the other hand, the bank can also make a proper return by investing in different institutions and financial managers to earn an adequate level of return.
The market share of the bank is substantial as the group had captured almost 8 million individual and small to medium-sized businesses. Due to this enlarged market share of the bank, the customers have different demands of services according to their needs. The company also has the financial division which deals with commercial appraisals of the companies before making an investment decision, and the group is one of the leading banking sectors in the industry in which PNC group is carrying its operations.
There are many branches and divisions of the group in different regions of the US which has increased the overall market share of the group. PNC different branches, ATMs, and solution centers are located in different geographical locations of the US, especially Mid-Atlantic, Midwest, and Southeast region of the US. Due to the increased operations in different geographic areas, the company tends to have more staff needs to satisfy the customer needs in different geographic regions of the group (Naude, 2009).
One of the major competitors of PNC group in the commercial bank industry is Wells Fargo (WLC). Wells Fargo is an American multinational financial service which has headquarters in San Francisco, California with central offices operating across the US. It is the world's 4th largest from market capitalization perspective and 4th largest from US banks that have total assets. This bank is also a leading bank in the banking industry in which PNC is operating, so a stiff competition is between these banks. PNC group has to innovate its product range and to introduce new ideas for the increase in the financial and other non-financial services for the client. As far as the business competition is concerned, the baking sector is globalized nowadays with one bank connected with other banks through online channels.
Therefore, the IT system within the banking system should be strong enough to strive for the competition in the market; also there should be firewall protection of the software used by the banks to protect from virus and other things. There should be robust control procedures implemented in the banks to protect their systems from system hacks, once the system is hacked the confidential information of the customers is in stake, and they may sue the bank for the irresponsible behavior.
Section 3: Discussion of the Banking Practices
The PLC financial group has become a market leader in the commercial banking sector. The success of the company to be the market leader of the industry was largely dependent on the management of the company who had implemented robust control procedures and used the capital of the shareholders with sufficient care to maximize the wealth of the shareholders of the company. The period of 2007-2009 was the years of financial crises for the bank where the bank as seen to be bankrupt and maybe continue as going concern entity, the assets of the bank are called into liquidation and the creditors are claiming their amount due from the bank.
In this tough situation of financial crises the management of the company has decided to use the service of TARP act, which authorized the Treasury secretary of the US to purchase certain amount of assets from the bank to bring back the confidence level of the PNC group in the financial market. By using the services of TARP, the company is back on track with most of its competitors are paid off (Campello et al., 2010). Authorize banks said to be going concern which can carry operations in the scheduled time. PNC group will acquire the 5.2 billion stock of Cleveland and the sale of the preferred stock of the PLC group to the Treasury department of the US as part of the implementation program of the TARP act which was recently named as EESA (Khnaio, 2010).
The firm had implemented strong control procedures and made valid investment decisions to expand its group in the future and to avoid the financial crises to occur in the future period. The management of the group is much concerned with maximizing the wealth of the shareholders of the company who had invested in the banking group (Campello et al., 2010). Investment decisions are analyzed to maximize the return on investment and to increase the market share of the group in the future period.
Section 4: Discussion of the Size and Scale of the TARP Program
TARP is a program in the US, which is quite significant in size and scale is a program in which toxic assets of the company are purchased to strengthen the financial position of the company in the future. The initial authorized expenditure available to TARP is up to $700 billion for which amount the assets of the company are authorized to purchase by the secretary of the treasury department of the US. The EESA created the TARP program. The target assets used for the purchase under the TARP program were the same as the collateralized debt obligation when the market was in the booming phase in the year 2007. The TARP program liquidity increases assets and purchasing power. They allow companies who are facing crises to improve their balance sheet position to enhance their liquidity position in the future.
Resolution Trust Corp (RTC) is the US governed asset management company that is engaged with liquidating the assets of a company. The company purchases typically the assets of a company that is primarily declared to be insolvent as a consequence of the savings and loan crises in the 1980s (Campello et al., 2010). The comparison of TARP is made with RTC which is also working...
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