Citizens Financial Group, Inc. · NYSE:CFG
Citizens Financial — Barclays Global Financial Services Conference 2019
35 slides from Citizens Financial's conference presentation, Sep 10, 2019
Slide 1: Barclays Global Financial Services Conference
Barclays Global Financial Services Conference Bruce Van Saun Chief Executive Officer September 10, 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 Private Securities Litigation Reform Act of 1995. Statements regarding potential future share repurchases and future dividends are for
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 $116.8 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 ─ Healthcare We
Slide 5: Committed to excellence in every dimension
Committed to excellence in every dimension Strong Commitment to Best-in-class Leaders in risk culture customers talent management Commitment to #3 2019 American Top-flight Driving franchise colleagues and a Banker/ management team value through astute meaningful work Reputation and board capital all
Slide 6: Closing the gap to peers and building a high-performing bank
Closing the gap to peers and building a high-performing bank(1) $s in billions Peer Peer ranking Average(2) (out of 10)(2) Observations Net Interest $4.5 ~$4.7 $3.8 $4.2 Income $3.3 $3.4 Reflects growth and balance ~6% #4 sheet optimization initiatives 2014 2015 2016 2017 2018 2019 C ~$1.8 Fee Incom
Slide 7: Closing the gap to peers and building a high-performing bank (efficiency)
Closing the gap to peers and building a high-performing bank(1) $s in billions, excluding EPS Peer Peer ranking average(2) (out of 10)(2) Observations ~$2.7 $2.3 $2.6 $1.9 Driving strong revenue PPNR $1.5 $1.6 ~7% #3 growth and positive operating leverage 2014 2015 2016 2017 2018 2019 C 68.7% 66.5%
Slide 8: Strong execution has led to outperformance vs peers
Strong execution has led to outperformance vs peers(1) 2Q19 vs. 3Q13 Strong operating leverage Efficiency improvement PPNR increase (Positive operating leverage) (Efficiency ratio change) (Pre-provision net revenue) ` CFG Peer average 21.6% 87.4% vs Peers vs Peers vs Peers 15.8% 5% 35% 52.2% 5.8% -5
Slide 9: We delivered a strong 2Q19 and maintain a positive 2019 outlook
We delivered a strong 2Q19 and maintain a positive 2019 outlook Citizens 2Q19 results highlight disciplined execution and continued momentum ─ Delivered EPS growth 9% YoY on Underlying basis(1); 14% for first half ─ 58.0% efficiency ratio on Underlying basis(1) ─ Positive operating leverage YoY on U
Slide 10: We have made consistent progress broadening capabilities
We have made consistent progress broadening 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 bank-
Slide 11: Consumer Banking making the investments to position us for the future
Consumer Banking making the investments to position us for the future Enhancing product and advisory capabilities; aiming to be ‘trusted advisor’ Improving customer experience through significant investments in new Continued technologies and seamless integration of digital and physical distribution
Slide 12: Commercial Banking well-positioned for continued growth
Commercial Banking well-positioned for continued growth Enhanced coverage model, expanded geographic reach & solution sets, strengthening fee income with integrated approach Driving momentum with up-tiered talent and geographic expansion Continue to serve core Enhancing product and advisory capabili
Slide 13: Key performance drivers into 2020 and beyond
Key performance drivers into 2020 and beyond Continuous Invest in future-oriented digital, data and technology platforms improvement Continue to drive improved efficiency effectiveness through Tapping Our mindset Potential (“TOP”) and Balance Sheet Optimization (“BSO”) initiatives Consumer Grow and
Slide 14: Launching a significant TOP Program
Launching a significant TOP 6 Program $s in millions Embarking on an ambitious journey to transform how we operate and deliver for customers and colleagues – expected to deliver ~$300-$325 million in pre-tax run rate benefit by YE2021 Targeted TOP program benefits(1) Operating leverage ~$300-325 ~$2
Slide 15: Building fee capabilities organically and through targeted acquisitions
Building fee capabilities organically and through targeted acquisitions Significant opportunity to improve fee income with focused strategies Wealth Wealth revenue potential(1) (2018 Wealth fees/earning assets) Generate Wealth brand awareness and leverage client analytics to target highest potential
Slide 16: Highly disciplined on credit
Highly disciplined on credit $s in billions 2019 Bank Holding Company-run loss rate of 4.1% on loan portfolio improved by 50 bps relative to 2018(1) Super prime/prime-focused, core retail portfolio; Granular/diverse core commercial portfolio; refreshed FICOs improved YoY(2) risk-ratings improved YoY
Slide 17: Continued strong credit performance
Continued strong credit performance $s in billions Nonperforming loans Strong Performance vs. Peers(1) $1.1 $1.0 $0.9 $0.8 $0.8 Retail NCO% Commercial NCO% 0.5% 0.5% 0.4% 0.4% 0.5% 0.2% 0.3% 0.1% 0.2% 0.2% 0.4% 0.4% 0.5% 0.4% 0.4% 0.1% 0.2% 0.1% 0.1% 0.2% 2015 2016 2017 2018 2Q19 2Q18 3Q18 4Q18 1Q19
Slide 18: Prudently managing capital
Prudently managing capital Capital ratio trend Capital priorities Continue to normalize capital levels and deliver 13.8% 13.4% 13.3% 13.4% 13.4% attractive shareholder returns (Targeted dividend 11.2% payout of 35-40%) 10.8% 10.6% 10.5% 10.5% — Maintain flexibility for organic growth/targeted acquis
Slide 19: 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 driven by
Slide 20: Appendix / Key performance metrics, Non-GAAP financial measures and reconciliations
Appendix / Key performance metrics, Non-GAAP financial measures and reconciliations 20
Slide 21: 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 Growing total households with a strategic focus 5.7 5.0 5.3 on
Slide 22: Enhancing our platform - Consumer
Enhancing our platform - Consumer Enhancements(1) Partnerships Recognition(2) Ranked #1 Enhanced digital capabilities with Citizens Access®; raised $5.4 billion nationwide Automated investing platform for Wealth customers Created top-15 bank owned mortgage servicer & originator with $91.8 billion se
Slide 23: Commercial Banking – highlights
Commercial Banking – highlights $s in millions Lead relationship growth(1) Capital Markets fee income ~$216 $194 $179 210 $136 192 $104 149 122 $108 2015 2016 2017 2018 1H19 Annualized Global Markets 2015 2016 2017 2018 ~$128 $95 $110 Successful expansion into Southeast and Texas $88 $76 Acquired ~1
Slide 24: 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 clients im
Slide 25: Strong progress across key deposit metrics
Strong progress across key deposit metrics $s in billions Focused on growing lower-cost core deposits(1) Strategies to grow deposits cost-effectively Continue to enhance retail product suite Data & analytics drive holistic and personalized $62.3 customer-targeting models across all products $60.9 −
Slide 26: 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 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: 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 29: 2Q19 GAAP financial summary
2Q19 GAAP financial summary For The Six Months Ending June 30, Reported 2Q19 change from 2019 Change $s in millions 2Q19 1Q19 2Q18 1Q19 2Q18 2019 2018 2018 $/bps % $/bps % $/bps % Net interest income $ 1,166 $ 1,160 $ 1,121 $ 6 1 % $ 45 4 % $ 2,326 $ 2,212 $ 114 5 % Noninterest income 462 428 388 34
Slide 30: 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 30
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: 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 33
Slide 34: Key performance metrics, Non-GAAP financial measures and 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.
3* Citizens Financial Group, Inc.”
Citizens Financial Group — Barclays Global Financial Services Conference 2019 on 6ix