Fitch Affirms PNC's Ratings.

Business Editors

NEW YORK--(BUSINESS WIRE)--Jan. 18, 2002

Fitch has affirmed all ratings of PNC Financial Services Group, Inc. (PNC) and its affiliates. The affirmation follows PNC's announcement of special charges resulting from strategic actions taken to reposition the franchise. The Rating Outlook for all entities remains Stable. A complete list of ratings follows at the end of this release.

Since 1998, PNC has been transforming itself from traditional commercial banking into a diversified financial services company with a specialization in asset management. To achieve the transformation, PNC has exited many low-return, competitive and capital intensive business lines, while investing new funds in fee-producing business lines in the asset management/processing industry.

PNC took another important step in this transition at the close of 4Q01, when it transferred a major portion of its institutional loan book to Held for Sale. In so doing, it incurred a $424 million charge to adjust the loans transferred to their current value. Less than half of this charge reflects credit impairment, with the bulk representing interest rate and liquidity discounts. PNC is thus able to exit many less-profitable single-relationship credits that do not represent an efficient use of capital.

PNC also took charges to reduce its venture capital portfolio and to exit auto leasing. The total of all special charges reached $615 million and absorbed more than half of 2001's earnings. For the full year 2001, PNC earned $567 million, down from $1.279 billion in 2000.

Despite the magnitude of these charges, Fitch believes that PNC's earnings generation power remains intact. Fitch also believes that, over the long term, management has been successful in reducing credit risk and creating a well-balanced, highly profitable franchise. For these reasons, Fitch affirms the company's Ratings and Outlook.

PNC's record shows the potential for an upgrade or Positive Outlook if the company demonstrates strong performance once the transitional period is completed. In particular, the company should maintain sound asset quality ratios in the remainder of its loan portfolio, and should continue profitable growth in its fee-based businesses.

Liquidity and the balance sheet structure should continue to strengthen as the Held For Sale portfolio is liquidated.

The capital structure will benefit from the deleveraging effect of disposing of the Loans Held for Sale Portfolio. However, this benefit will be offset by planned stock buybacks. Management intends to maintain capital levels with a substantial cushion above regulatory minimums. Capital ratios would therefore be equal to or higher than peers' ratios.

Ratings Affirmed:

PNC Financial Services Group

-- Long-term Senior `A+';

-- Long-term Subordinated `A';

-- Preferred Stock `A';

-- Short-term `F1';

-- Individual `B';

-- Support '5';

-- Rating Outlook Stable.

PNC Funding Corp.

-- Long-term Senior `A+';

-- Long-term Subordinated `A';

-- Short-term `F1';

-- Individual `B';

-- Support '5';

-- Rating Outlook Stable.

PNC Bank N.A.

-- Long-term deposits `AA-';

-- Long-term Senior `A+';

-- Long-term Subordinated `A';

-- Short-term Senior `F1+';

-- Short-term Deposits `F1+';

-- Individual `B';

-- Support '4';

-- Rating Outlook Stable.

PNC Bank Delaware

-- Long-term deposits `AA-';

-- Long-term Senior `A+';

-- Short-term Senior `F1+';

-- Short-term Deposits `F1+';

-- Individual `B';

-- Support '4';

-- Rating Outlook Stable.

PNC Advisors, National Association

-- Long-term deposits `AA-';

-- Long-term Senior `A+';

-- Short-term Senior `F1+';

-- Short-term Deposits `F1+';

-- Individual `B';

-- Support '4';

-- Rating Outlook Stable.

PNC Financial Corp.

-- Long-term Subordinated `A'.

PNC Capital Trust A

PNC Capital Trust B

PNC Capital Trust C

PNC Institutional Capital Trust A

PNC Institutional Capital Trust B

-- Trust Preferred `A'.