Citizens Financial Group, Inc. · NYSE:CFG
Citizens Financial — Barclays Americas Select Conference 2018
34 slides from Citizens Financial's conference presentation, May 14, 2018
Slide 1: Barclays Americas Select Conference 2018
Barclays Americas Select Conference 2018 John F. Woods Chief Financial Officer May 15, 2018 Exhibit 99.1
Slide 2: Forward-looking statements and use of key performance metrics and non-GAAP financial measures
Forward-looking statements and use of key performance metrics and non-GAAP financial measures This document contains forward-looking statements within the Private Securities Litigation Reform Act of 1995. Statements regarding potential future share repurchases and future dividends are forward-lookin
Slide 3: Solid franchise with leading positions in attractive markets
Solid franchise with leading positions in attractive markets CFG corporate headquarters Providence, RI CFG branch location CFG non-branch location Assets $153.5 Rank #13 Loans $111.4 Rank #12 Deposits $115.7 Rank #11 Top 5 deposit market share in 9 of our 10 largest MSAs(1) #2 deposit market share i
Slide 4: Business Overview
Business Overview Deposits $115.7 billion(2) Loans and Leases $111.4 billion(2) Consumer Commercial Consumer In Footprint Retail Deposit Services Mobile/Online Banking Mortgage(1) Home Equity Loans/Lines Wealth Management Business Banking PERL(1) National Auto Education Finance Unsecured Commercial
Slide 5: Strong execution and consistent progress
annualized Efficiency ratio(1) mid-50%’s Strong execution and consistent progress ROTCE(1) (Return on average tangible common equity) (2) Medium-term target Reported results Adjusted/Underlying results (1) (2) (2,3) CET1(4) (Common equity tier 1 ratio) Medium-term target (2) EPS(1) (Diluted EPS) Out
Slide 6: How we will stand out from the competition
How we will stand out from the competition Customer-centric focus reflecting: Expertise and deep knowledge of customers High-quality advice Team approach Insights from data analytics Selective in how and where we play Seeking to self-fund investments through efficiency enhancements; mindset of conti
Slide 7: Medium-term targets
Medium-term targets Note: Medium-term financial targets assume real GDP growth of ~2.5–3.0% annually with no recession, increase in fed funds rate with ~2.25 bps rate moves per annum (25 bps each move), and unemployment rate ~3.5-4.0%. Please see important information on Key Performance Metrics and
Slide 8: Keys to delivering higher medium-term returns
Keys to delivering higher medium-term returns Tapping Our Potential (“TOP”) and Balance Sheet Optimization (“BSO”) Drive growth in fee businesses Active capital management Enterprise-wide initiatives to drive improvement in performance Rigorous efficiency program to allow self-funding of investments
Slide 9: Current TOP program targeting run-rate pre-tax benefit of ~$95-$110 million by end of 2018
Current TOP program targeting run-rate pre-tax benefit of ~$95-$110 million by end of 2018 Opportunities to improve returns: TOP programs Efficiency initiatives (examples) Organization simplification: Spans and layers, centralization/ centers of excellence, role clarity Lean/Process improvement: Red
Slide 10: BSO: Rigorous program to improve returns while driving growth
BSO: Rigorous program to improve returns while driving growth 1Q18 YoY NIM expansion of 20 bps reflects 7 bps contribution from BSO efforts Assets Liabilities Reposition/optimize loan mix across categories Improve returns while maintaining relatively stable stress losses Reallocate capital within lo
Slide 11: Deposit cost growth remains in line with overall deposit growth
Deposit cost growth remains in line with overall deposit growth Note: Represents total deposit costs and noninterest-bearing deposit growth based on period end data. Source: SNL Financial, 10-Qs, 10-Ks, Earning Releases and Supplements. Deposit growth vs. Deposit cost growth (1Q18 vs. 3Q15) Deposit
Slide 12: Citizens Access - a new direct-to-consumer digital channel
Citizens Access - a new direct-to-consumer digital channel The Citizens Access platform A nationwide direct-to-consumer platform for digitally-savvy consumers who value the flexibility and convenience of an online offering Initially offering FDIC-insured online savings accounts and certificates of d
Slide 13: Citizens Access benefits: digital capabilities and analytics
Enhances digital capabilities and leverage analytics Gain access to new customers and expands distribution reach Improves efficiencies, further strengthens liquidity and diversifies funding Provides opportunity to leverage our investments in data and analytics capabilities that enhance our ability t
Slide 14: Remain rate sensitive
Remain rate sensitive Net interest income positioned to continue to benefit from rising rates Our asset sensitivity has remained relatively stable at 5.0% Given our current positioning, 25 bp increase in rates would generate ~$15 million of NII per quarter ~75% of our sensitivity is to the short-end
Slide 15: Plans to adjust capital structure but remain above peers
Plans to adjust capital structure but remain above peers Highlights Common equity tier 1 comparison(1) Source: SNL Financial. CFG data as of 1Q18. Peer data as of 4Q17. Capital targets from company earnings calls, company disclosures and CFG estimates. As of 2/8/18. Source: Bloomberg Strong CET1 cap
Slide 16: Further opportunities to improve returns: Growth in fee income businesses
Fee Income Wealth Investments in FCs and sales, technology platforms and products with shift toward managed money SpeciFi™ robo-advisor product Business Banking Fundation FinTech partnership to automate small business underwriting Mortgage Remix toward direct-to-consumer and conforming product Furth
Slide 17: Building an ecosystem of FinTech partnerships to accelerate our path to market
Building an ecosystem of FinTech partnerships to accelerate our path to market New digital (mobile-first) platform Simple and fast account opening experience Digitized home buying process Digitized HELOC application process Digital invoice and payment collection solution for Commercial customers Dig
Slide 18: Delivering for our customers
Delivering for our customers Citizens Bank SpeciFiSM 2018 Temkin Experience Rating, U.S. March 2018. J.D. Power 2017 U.S. Retail Rankings Satisfaction Study, April 2017. Top 5 reflects wait times and in-person best practices for J.D. Power-surveyed footprint. Barlow Research 2017 Voice of the Custom
Slide 19: Citizens has delivered consistent EPS growth, though valuation has fallen off
Citizens has delivered consistent EPS growth…. Compound annual growth rate. Please see important information on Key Performance Metrics and Non-GAAP Financial Measures at the beginning and end of this presentation for an explanation of our use of these metrics and non-GAAP financial measures and the
Slide 20: Key messages
Key messages Solid franchise with leading positions in attractive markets Achieved IPO-based objectives and elevated our targets Citizens results highlight disciplined execution and continued momentum Robust balance sheet position Credit quality and key coverage metrics remain strong Remain focused
Slide 21: Appendix
Appendix Xx Citizens nancial Group,
Slide 22: Our vision and credo guide us
Our vision and credo guide us To help our customers, colleagues and communities reach their potential To be a top-performing bank distinguished by its customer-centric culture, mindset of continuous improvement and excellent capabilities We perform our best every day so we can do more for our custom
Slide 23: Making consistent progress against our financial goals
Making consistent progress against our financial goals Adjusted/ Underlying efficiency ratio(1) ~13 - 15% Key Indicators Adjusted/ Underlying ROTCE(1) EPS Adjusted/Underlying diluted EPS(1) Common equity tier 1 ratio(2) (3) Underlying results(1) Reported results(1) Adjusted results(1) Please see imp
Slide 24: Executive Summary: Positioning Citizens to Investors
Source: CapIQ and Company filings. Peers include CMA, BBT, FITB, MTB, PNC, RF, STI and USB. As a result of KEY's 3Q16 acquisition of First Niagara, KEY's results have been excluded from the Peer average and Peer median. Where disclosed, peer results adjusted for unusual or special revenue, expense a
Slide 25: Executive Summary: Positioning Citizens to Investors
Executive Summary---Positioning Citizens to Investors Well-controlled expenses; investing for growth (Noninterest expense change) Efficiency improvement (Efficiency ratio(1) change) PPNR (Pre-provision Net Revenue) Return on equity (Return on average tangible common equity(1) change) Improving ROA a
Slide 26: Citizens Access – Consumers rapidly adopting digital/direct platforms
Citizens Access – Consumers rapidly adopting digital/direct platforms Digital/Direct is the fastest growing channel in the industry Direct bank retail deposits grew at a ~18% CAGR from 2002 to 2017 compared with a ~3% CAGR for traditional bank retail deposits Our objective is to provide an exception
Slide 27: Citizens Access expands distribution to reach new customers
Citizens Access expands distribution to reach new customers Target customer Profile: Opportunistic and digitally-savvy, affluent or mass-affluent consumers, large balances ($75k-$100K) Preferences: Opportunity to receive consistently better rates with little or no effort, security of deposits, simpl
Slide 28: Future oriented digital services and technology platforms
Future oriented digital services and technology platforms Adaptive Security Open Architecture Cloud Agile Modernize Strategic Platforms Data analytics Enabling a data environment Deliver fast access to high quality data Prepare for emerging threats through trusted, simple and secure capabilities Del
Slide 29: Key performance metrics, Non-GAAP financial measures and reconciliations
Appendix / Key performance metrics, Non-GAAP financial measures and reconciliations
Slide 30: Key performance metrics, Non-GAAP financial measures and reconciliations
Key performance metrics, Non-GAAP financial measures and reconciliations $s in millions, except share, per share and ratio data
Slide 31: Key performance metrics, Non-GAAP financial measures and reconciliations
Key performance metrics, Non-GAAP financial measures and reconciliations $s in millions, except share, per share and ratio data
Slide 32: Key performance metrics, Non-GAAP financial measures and reconciliations
Key performance metrics, Non-GAAP financial measures and reconciliations $s in millions, except share, per share and ratio data
Slide 33: Key performance metrics, Non-GAAP financial measures and reconciliations
Key performance metrics, Non-GAAP financial measures and reconciliations $s in millions, except share, per share and ratio data
Slide 34: Citizens Financial Group, Inc.
3* Citizens Financial Group, Inc.”
Citizens Financial Group — Barclays Americas Select Conference 2018 on 6ix