Citizens Financial Group, Inc. · NYSE:CFG
Citizens Financial — Barclays Americas Select Conference 2019
35 slides from Citizens Financial's conference presentation, May 14, 2019
Slide 1: Barclays Americas Select Conference 2019
Barclays Americas Select Conference 2019 Bruce Van Saun Chief Executive Officer May 14, 2019
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 meaning of the Private Securities Litigation Reform Act of 1995. Statements regarding potential future share repurchases and future dividends are
Slide 3: Strong franchise with leading positions in attractive markets
Strong franchise with leading positions in attractive markets(1) Attractive footprint with large mass-affluent and affluent segments Franchise highlights Footprint GDP above national average — Personal consumption 43% higher than the national average — Higher percentage of individuals with 4-year
Slide 4: Diversified and balanced business model
Diversified and balanced business model(1) Consumer Loans and Leases Commercial $117.6 billion(3) In Footprint Coverage Retail Deposit Services Commercial & Industrial Banking Mobile/Online Banking Commercial Real Estate 53% Mortgage(2) Corporate Verticals 47% Home Equity Loans/Lines ─
Slide 5: Aiming for Excellence
Aiming for Excellence Mission To help our customers, colleagues and communities reach their potential Objective is to be a top-performing bank that delivers well for Strengthening all stakeholders our franchise while Committed to excellence in every dimension delivering Focused on long-term
Slide 6: Delivering on our commitments
Delivering on our commitments Continue to hit targets, raise the bar Underlying ROTCE(1) ~14-16% ~13-15% 14% 13% 2018 2018 medium- Results medium- Results New New medium- medium- term term target 2018 target 2018 4Q18 4Q18 term term target target Underlying efficiency ratio(1) Common equity tier 1
Slide 7: Strong execution of turnaround effort has led to outperformance vs peers
Strong execution of turnaround effort has led to outperformance vs peers(1) 4Q18 vs. 3Q13 Strong operating leverage Efficiency improvement PPNR increase (Positive operating leverage) (Efficiency ratio change) (Pre-provision net revenue) ` 23.9% CFG Peer average 89.6% vs Peers vs Peers vs Peers 12.
Slide 8: Efficiency: Closing the gap to peers and building a high performing bank
Closing the gap to peers and building a high performing bank $s in billions, excluding EPS Outpacing peers(2) % Better Performance rank Strong Improvement(1) than peers (out of 10) Observations $2.3 $2.6 $1.6 $1.9 Driving strong revenue PPNR $1.5 39% #3 growth and positive operating leverage 201
Slide 9: Closing the gap to peers and building a high performing bank
Closing the gap to peers and building a high performing bank $s in billions Outpacing peers(2) % Better Performance rank Strong Improvement(1) than peers (out of 10) Observations $4.5 Net Interest $3.3 $3.8 $4.2 $3.4 Income Reflects growth and balance 7% #4 sheet optimization initiatives 2014 20
Slide 10: We have made consistent progress broadening our capabilities
We have made consistent progress broadening our capabilities 1st regional bank Innovating for Created innovative merchant finance to market with attractive growth partnership platform with exceptional national digital Consumer Banking customer experience platform Have taken mortgage Created top-15 b
Slide 11: Committed to excellence in every dimension
Committed to excellence in every dimension Strong Commitment to Best-in-class Solid risk culture customers talent management Commitment to Serving as trusted Top-flight Recapturing the value colleagues and a advisor management team of franchise with meaningful work and board prudent loan gro
Slide 12: Making the investments to position us favorably for the long-term
Making the investments to position us favorably for the long-term Driving momentum with up-tiered talent and geographic expansion Enhancing product and advisory capabilities Commercial Improving client experience with new tools and data Banking Deepening relationships Diversifying fee inco
Slide 13: Commercial Banking – highlights
Commercial Banking – highlights $s in millions Lead relationship growth(1) Capital Markets fee income $194 $179 210 $104 $136 192 149 122 2015 2016 2017 2018 Global Markets 2015 2016 2017 2018 $88 $95 $110 Successful expansion into Southeast and Texas $76 Acquired ~1,050 net new clients since 20
Slide 14: Enhancing our platform - Commercial
Enhancing our platform - Commercial Enhancements Partnerships Simplified client experience, with new tools to manage data and help clients access End-to-end workflow tool to improve information speed of customer onboarding and Enhanced treasury solutions capabilities to collaboration help client
Slide 15: Consumer Banking – highlights
Consumer Banking – highlights Investments in data analytics, digitization, Driving strong customer acquisition branch modernization and customer journeys # of Total Households are driving positive customer & financial results in millions 5.0 5.3 Growing total households with a strategic focus on
Slide 16: Enhancing our platform - Consumer
Enhancing our platform - Consumer Enhancements Partnerships Recognition(1) Ranked #1 Enhanced digital capabilities with Citizens Access®; raised $4.6 billion nationally as of 1Q19 Automated investing platform for Wealth customers Created top-15 bank owned mortgage servicer & originator with $89.
Slide 17: Investing in future-oriented digital services and technology platforms
Investing in future-oriented digital services and technology platforms Delivering a customer-focused, adaptable, secure & resilient technology environment Modernize strategic Data analytics Adaptive security platforms Minimize manual processes; Convert data into intelligence Prepare for emergi
Slide 18: Continuously streamlining expense base to self-fund required investments
Continuously streamlining expense base to self-fund required investments(1) $s in millions Focus on top-line growth and expense discipline drives positive operating leverage Top program benefits Operating leverage ~$200 ’14-18 ~$140 6.8% CAGR ~$115 ~$115 ~$95-105 Revenue 4.2% 4.0% 3.3% 7% 3.3% Expen
Slide 19: Prudently managing capital
Prudently managing capital Capital ratio trend Capital priorities Continue to normalize our capital levels while 13.9% 13.8% 13.4% 13.3% 13.4% delivering attractive returns to our shareholders 11.2% 11.2% 10.8% 10.6% through a combination of dividends (target payout 10.5% Jan. 2019 35-40%) and sha
Slide 20: Diversified portfolio with continued strong credit performance
Diversified portfolio with continued strong credit performance $59.9 billion $56.8 billion 4Q18 retail portfolio(1) 4Q18 commercial portfolio(2) Non-Core LeasesNon-Core Other Business Education InSchool 1% Residential Banking 4% 1% 6% 5% 5% Mortgage Education Refi 10% 32% Credit Cards 3% CRE 26% 64%
Slide 21: Strong credit-quality trends continue
Strong credit‐quality trends continue $s in millions Overall credit quality remains strong, reflecting growth in lower-risk retail portfolios and a stable risk profile in commercial Nonperforming loans Allowance for loan and lease losses $1,216 $1,236 $1,236 $1,242 $1,060 $1,045 156% $871 142% $797
Slide 22: We delivered a strong 1Q19 and maintain a positive 2019 outlook
We delivered a strong 1Q19 and maintain a positive 2019 outlook Citizens 1Q19 results highlight disciplined execution and continued momentum ─ Delivered EPS growth of 18% YoY, 19% on Underlying basis(1) ─ 13.0% ROTCE, 13.1% on Underlying basis(1) ─ 59.0% efficiency ratio, 58.7% on Underlying basis
Slide 23: Looking forward
Looking forward Confident that we can continue to perform well and drive toward becoming a top performing regional bank that delivers well for its stakeholders Strong and experienced board and leadership team, best-in-class talent Success will be Commitment to excellence in every dimension drive
Slide 24: Key messages
Key messages Strong franchise with leading positions in attractive markets Achieved IPO-based objectives and elevated our targets Robust balance sheet position with focus on disciplined capital allocation ─ Credit quality and key coverage metrics remain strong ─ Continuing to grow more attract
Slide 25: Appendix / Key performance metrics, Non-GAAP financial measures and reconciliations
Appendix / Key performance metrics, Non-GAAP financial measures and reconciliations 25
Slide 26: Highly disciplined on credit: diversified and granular core loan mix
Highly disciplined on credit: diversified and granular core loan mix $s in billions Core retail portfolio refreshed Core commercial portfolio risk-ratings FICOs improved YoY(1) improved YoY(1) $57.4 $59.0 $56.0 <640 6% $51.2 3% 6% 5% 640-679 6% B- and lower 3% 14% 19% 18% 14% 680-739 B+ to B 740-799
Slide 27: Notes
Notes Notes on Key Performance Metrics and Non-GAAP Financial Measures See important information on Key Performance Metrics and Non-GAAP Financial Measures, as applicable, at the beginning and end of this presentation for an explanation of our use of these metrics and non-GAAP financial measures and
Slide 28: Notes
Notes Notes on Key Performance Metrics and Non-GAAP Financial Measures See important information on Key Performance Metrics and Non-GAAP Financial Measures, as applicable, at the beginning and end of this presentation for an explanation of our use of these metrics and non-GAAP financial measures and
Slide 29: 2014-2018 GAAP financial summary
2014-2018 GAAP financial summary $s in millions 2018 2017 2016 2015 2014 Net interest income $ 4,532 $ 4,173 $ 3,758 $ 3,402 $ 3,301 Noninterest income 1,596 1,534 1,497 1,422 1,678 Total revenue 6,128 5,707 5,255 4,824 4,979 Noninterest expense 3,619 3,474 3,352 3,259 3,392 Pre‐provision profit 2,5
Slide 30: 1Q19 GAAP financial summary
1Q19 GAAP financial summary Reported 1Q19 change from $s in millions 1Q19 4Q18 1Q18 4Q18 1Q18 $/bps % $/bps % Net interest income $1,160 $1,172 $1,091 $ (12) (1)% $ 69 6% Noninterest income 428 421 371 7 2 57 15 Total revenue 1,588 1,593 1,462 (5) — 126 9 Noninterest expense 937 951 883 (14) (1) 54
Slide 31: Key performance metrics, Non-GAAP financial measures and reconciliations, Underlying
Key performance metrics, Non-GAAP financial measures and reconciliations, Underlying $s in millions, except share, per share and ratio data 31
Slide 32: Key performance metrics, Non-GAAP financial measures and reconciliations, Underlying
Key performance metrics, Non-GAAP financial measures and reconciliations, Underlying $s in millions, except share, per share and ratio data 32
Slide 33: Non-GAAP reconciliations – Underlying excluding FAMC
Key performance metrics, Non-GAAP financial measures and reconciliations – Underlying excluding FAMC $s in millions, except share, per share and ratio data 33
Slide 34: Non-GAAP reconciliations – Underlying excluding Acquisitions
Key performance metrics, Non-GAAP financial measures and reconciliations – Underlying excluding Acquisitions $s in millions, except share, per share and ratio data 34
Slide 35: Citizens Financial Group, Inc.
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