Citizens Financial Group, Inc. · NYSE:CFG
Citizens Financial — Credit Suisse 19th Annual Financial Services Forum (February 2018)
18 slides from Citizens Financial's conference presentation, Feb 14, 2018
Slide 1: Credit Suisse 19th Annual Financial Services Forum
Credit Suisse 19th Annual Financial Services Forum John F. Woods Chief Financial Officer February 14, 2018
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. Any statement that does not describe historical or current facts is a forward-looking statement
Slide 3: Solid franchise with leading positions in attractive markets
Solid franchise with leading positions in attractive markets $152.3 billion in total assets(1) Robust deposit market share of 12% in top 10 MSAs(2) – #2 deposit market share in New England(2) Diverse economies/affluent demographics CFG corporate headquarters Providence, RI CFG branch location Serve
Slide 4: Substantial progress in prudently growing the balance sheet
Substantial progress in prudently growing the balance sheet Top 5 deposit market share in 9 of 10 largest MSAs(4) Dimension(1) Rank(2) $90.9 billion $107.4 billion Assets: $152.3 billion #13 2012(11) 4Q17(11) Loans: $110.6 billion(3) #11 #12 nationally; 30% Deposits: $115.1 billion Top 5 rank in 9/1
Slide 5: Making consistent progress against our financial goals
Making consistent progress against our financial goals Strong execution against all strategic initiatives and continued momentum ROTCE(1) Medium-term Efficiency ratio(1) Medium-term (Return on average tangible common equity) target target 12.3% ~13-15% 68.5% 68.7% ~52-56% 67.6% 68.1% 66.5% 63.9% 7.7
Slide 6: Further opportunities to improve returns: TOP
Further opportunities to improve returns: TOP Continuous improvement - TOP programs Self-fund investments through efficiency, expense discipline and mindset of continuous improvement Use new technologies to deliver more effective outcomes at lower costs TOP IV program targeting run-rate pre-tax bene
Slide 7: Further opportunities to improve returns: BSO
Further opportunities to improve returns: BSO Balance Sheet Optimization (“BSO”) Improve risk-adjusted returns and NIM while driving growth Enterprise-wide initiative with the same intensity and rigor as our TOP efficiency programs Recycle capital into more accretive growth and relationship categori
Slide 8: Further opportunities to improve returns: Growth in fee income businesses
Further opportunities to improve returns: Growth in fee income businesses Fee income Consumer Commercial Wealth Capital & Global Markets Investments in FCs and sales, technology Broaden capabilities in DCM, M&A, CRE platforms and products with shift toward managed money Leveraging FX options/currenc
Slide 9: New medium-term financial targets
New medium-term financial targets Economic assumptions Medium-term financial targets ROTCE ~13-15% Real GDP growth ~2.5–3.0% annually; no recession Efficiency Ratio ~52-56% Fed Funds Rate ~2.25 rate moves per annum (25 bps each move) CET 1 ~10.0-10.25% Unemployment rate ~3.5-4.0% Dividend payout rat
Slide 10: Key messages
Key messages Citizens continues to execute well and deliver for shareholders ─ Strong 4Q17 results with Underlying ROTCE of 10.4% up from 4.3% in 3Q13(1) ─ Strong Underlying EPS growth of 29%, with operating leverage of 6.4% YoY, and efficiency ratio of 58.5%(1) ─ Tangible book value per share of $2
Slide 11: Appendix
Appendix 3* Citizens Financial Group, Inc.”
Slide 12: Remain rate sensitive
Remain rate sensitive Interest rate sensitivity ranking (200 bps gradual increase) 10.0% Net interest income positioned 6.2% 5.8% to continue to benefit from 5.1% 3.9% rising rates 3.5% 2.0% 1.6% ─ Our asset sensitivity has 1.5% 1.1% remained relatively stable at 5.1% CMA RF PNC CFG BBT MTB USB STI
Slide 13: Focus on growing fee income delivering steady progress
Focus on growing fee income delivering steady progress $ millions 7% Y/Y YoY fee income growth GAAP Consumer 3% Y/Y Adjusted(1) Wealth fees: Fee-based sales 37% for 4Q17. $381(1) Enhanced client targeting should drive $404 additional growth $377 $379 $370 $381 $387 (1) Mortgage fees: Seeing success
Slide 14: Further opportunities to improve returns: Capital management
Further opportunities to improve returns: Capital management Capital management CET1 capital comparison(1) Highlights Continue to maintain strong CET1 capital position relative CMA 11.6% to our peers ─ Expect annual normalization of ~30-40 bps given both CFG 11.1% 11.2%(2) capital return and strong
Slide 15: TOP IV initiatives ramping up and making good progress
TOP IV initiatives ramping up and making good progress New Channels Direct-to-Consumer Mortgage: direct marketing lead program launched; pull through rates ahead of expectations; delivering ancillary benefits to Home Equity Digital as a Sales Engine: technical build underway to drive more relevant a
Slide 16: 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 QUARTERLY TRENDS FULL Y EAR 4Q17 Change 2017 Change 4Q17 2Q17 4Q16 3Q13 4Q16 2017 2016 2015 2014 2016 $/bps % $/bps % Noninterest inc ome, A djusted/Underly ing: Noninteres
Slide 17: 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 QUARTERLY TRENDS FULL Y EAR 4Q17 Change 2017 Change 4Q17 2Q17 4Q16 3Q13 4Q16 2017 2016 2015 2014 2016 $/bps % $/bps % Return on average tangible c ommon equity and return o
Slide 18: Citizens Financial Group, Inc.
3* Citizens Financial Group, Inc.”
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