Natwest Group Plc · LSE:NWG
Natwest — RBS Citizens Financial Group — Barclays conference 2014
24 slides from Natwest's conference presentation, Mar 7, 2014
Slide 1: RBS Citizens Barclays Presentation
RBS Citizens Barclays Presentation Bruce Van Saun, Chief Executive Officer March 7, 2014 Note: Results reported on a US GAAP CFG legal entity basis to allow comparability with peers. RBS Group reported results were for US Retail and Commercial on an IFRS basis. A reconciliation from RBS Group US R&C
Slide 2: Key Messages
Key Messages RBS Citizens is an attractive franchise with a good foundation: ¾ Good geographical footprint and a balanced business mix ¾ Strong culture with emphasis on customers, colleagues, and community ¾ Robust product offerings that focus on our customers needs ¾ Capable and energized leadershi
Slide 3: Good foundation to deliver improving returns
Good foundation to deliver improving returns… Citizens operates in a 12 state footprint ...with an established presence within within 3 geographic regions... our footprint and nationally Mid West Mid-Atlantic New England Dimension Rank Assets ($122bn) #13 #12 National Loans ($87bn) Deposits ($92bn)
Slide 4: …with a balanced business mix
…with a balanced business mix Loan Composition Consumer Banking: December December Retail Banking 2009 2013 Business Banking (<$25mm) Wealth Management Home Lending Solutions Commercial Auto & Student Lending Commercial 36% 45% Consumer Consumer 64% 55% Commercial Banking: Middle Market
Slide 5: However, financial results need to improve…
However, financial results need to improve… Operating RoTCE% Efficiency Ratio 12%+ Low 71% 69% 10% 65% 60’s < 60% 4.7% 4.8% 5.1%* 2011 2012 2013 Medium Long 2011 2012 2013 Medium Long Term Term Term Term NIM% Sizable gap to peer RoTCE remains Lower NIM drives RoTCE gap, reflects 2.97% 2.90% 2.85
Slide 6: …and Citizens will need to deliver for all stakeholders
…and Citizens will need to deliver for all stakeholders Communities & Society Support sustainable prosperity Communities & Society Support sustainable prosperity Regulators Comply with Investors letter and Be a safe spirit of Regulators Customers and valuable rules and Comply with letter Serve our i
Slide 7: A program of initiatives is in place that will improve performance
A program of initiatives is in place that will improve performance Strategic Initiatives: Tactical Initiatives: Realizing the Full Potential of Our Core Business: Project Top: “Tapping Our Potential” – designed to make Citizens a more Customers remain at the center of what we do and we effective and
Slide 8: Consumer Banking is building a strong value proposition around simplicity and transparency
Consumer Banking is building a strong value proposition around simplicity and transparency... We are Citizens helping citizens bank better Simple Clear Personal Initiatives are creating more satisfied customers and deeper relationships: Launched new checking product that will improve considera
Slide 9: … and investing in new technology
… and investing in new technology June ’13: Simplified Branch Image Capture(BIC) New origination systems for Logon Screen teller system rolled out to all Mortgage and Auto branches in 2013 Nov ‘13: New iPad App Auto “Origenate” Completed the IDM Allowing more granular credit rollout to all deposit p
Slide 10: Commercial Banking is positioned for success by continuing to enhance our capabilities
Commercial Banking is positioned for success by continuing to enhance our capabilities and client-centric culture Improvements in client services & capabilities Revenue growth initiatives Recent Greenwich Assoc. survey results show an Build out /expand Specialty Verticals, MidCorporate, Strategi
Slide 11: RBS Citizens Barclays Presentation
RBS Citizens Barclays Presentation John Fawcett, Chief Financial Officer March 7, 2014 Note: Results reported on a US GAAP CFG legal entity basis to allow comparability with peers. RBS Group reported results were for US Retail and Commercial on an IFRS basis. A reconciliation from RBS Group US R&C o
Slide 12: FY 2013 Financial Summary
FY 2013 Financial Summary US GAAP $MM FY 13 FY 12 B/(W) vs. Prior Year Total Revenue Actual Actual $ % $MM 4,892 4,690 Total Revenue 4,690 4,892 (202) (4%) Total Expenses (3,217) (3,458) 241 7% 1,664 1,632 Provisions for Loan Loss (479) (413) (66) (16%) 3,228 3,058 Operating Profit 994 1,021 (27) (3
Slide 13: Revenue Composition
Revenue Composition US GAAP Benefit of deposit mix / pricing and commercial loan growth 1,400 1,200 (ex Gains) $MM 435 513 467 484 461 486 479 460 1,000 371 405 396 386 398 376 376 405 379 398 359 356 Fee Income Revenue 800 600 400 881 834 855 850 859 845 833 811 815 845 838 823 824 821 810 773 761
Slide 14: 2013 Net Interest Margin is stable
2013 Net Interest Margin is stable US GAAP Net Interest Margin Trend 900 881 800 855 850 859 845 845 834 833 838 823 824 821 811 815 810 3.03% 779 $MM 2.97% 2.96% 2.92% 2.97% 2.95% 773 761 769 700 748 2.86% 2.89% 2.86% 2.83% 2.88% 2.84% 2.80% 2.80% 600 2.75% 2.72% 500 2.52% 2.57% 2.48% 2.37% 400 150
Slide 15: Expenses remain well controlled
Expenses remain well controlled US GAAP $MM FY 2013 Expense Walk FY 2013 Expense / Avg Earning Assets 138 2012 Δ bps 77 18 18 6 10 14 Comerica 2.91% 2.99% (8) RBS 3.00% 3.11% (11) 3,458 Citizens 3,243 3,217 US 3.19% 3.30% (11) Bancorp Regions 3.32% 3.13% 19 December FY 2012 Litigation Pension FY 201
Slide 16: Credit risk metrics remain favorable
Credit risk metrics remain favorable US GAAP $MM Summary Allowance Walk $MM SBO 117 SBO 43 Driven by disciplined underwriting 1,295 All Other 384 All Other 436 1,260 177 14 103 Full year net charge-offs decrease 501 479 from 100bps in 2012 to 59bps in 2013 1,118 1,157 NPLs low and stable. 2013
Slide 17: We have strong asset quality…
We have strong asset quality… US GAAP FY 2013 NPLs / Loans % Reserves / NPLs % Comerica 0.95% Comerica 139% KeyCorp 1.15% KeyCorp 134% RBS Citizens 1.63% US Bancorp 94% M&T Bank 1.67% RBS Citizens 86% BB&T 1.91% M&T Bank 86% US Bancorp 1.92% Peer Avg 85% PNC 2.18% PNC 84% Peer Avg 2.22% BB&T 77% Sun
Slide 18: …and are well capitalized versus peers
…and are well capitalized versus peers US GAAP Q4 2013 Tier 1 Capital Ratio Common Equity Tier 1 Ratio RBS Citizens 13.5% RBS Citizens 13.5% PNC 12.4% KeyCorp 11.2% M&T Bank 12.0% Regions 11.2% KeyCorp 12.0% Comerica 10.6% BB&T 11.8% PNC 10.5% Regions 11.7% Peer Average 10.1% Peer Average 11.4% BB&T
Slide 19: Conclusion
Conclusion Bruce Van Saun, Chief Executive Officer March 7, 2014
Slide 20: The building blocks are in place
The building blocks are in place A compelling franchise 10th largest branch network in the US with extensive ATM, online, and mobile capabilities; well established franchise in core markets Strong, clean balance sheet with good asset quality and capital ratios Good balance, with growing and pr
Slide 21: RBS Citizens Financial Group, Inc.
a« RBS Citizens Financial Group, Inc.”
Slide 22: Appendix
Appendix 21
Slide 23: Announced Chicago Divestiture of Charter One Branches
Announced Chicago Divestiture of Charter One Branches Definitive agreement entered into with U.S. Bancorp in January to sell the Chicago- area branches, small business Chicago Branches operations and select middle market relationships ¾ Anticipated to close mid-2014 CFG will maintain a presence
Slide 24: US R&C Core Results to Total CFG Reconciliation
US R&C Core Results to Total CFG Reconciliation FY 2013 IFRS GAAP External Replace Internal Business US R&C "Group Alloc" US R&C US R&C US R&C International Services Central Total GAAP vs. Total Core with Internal Core Non Core Total Banking (Offshore) Items CFG IFRS CFG Net Interest Income 2,960 2,
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