Citizens Financial Group, Inc. · NYSE:CFG
Citizens Financial — Deutsche Bank Global Financial Services Conference 2019
24 slides from Citizens Financial's conference presentation, May 29, 2019
Slide 1: Deutsche Bank Global Financial Services Conference
Deutsche Bank Global Financial Services Conference May 29, 2019 Brad Conner Vice Chairman, Head of Consumer Banking 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 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) Assets $161.3 Rank #13 Loans $117.6 Rank #11 Deposits $123.9 Rank #11 Footprint GDP above national average Personal consumption 43% higher than the national average Higher percentage of individuals with 4-year degrees or higher Higher
Slide 4: Diversified and balanced business model
Diversified and balanced business model(1) Commercial Coverage Commercial & Industrial Banking Commercial Real Estate Corporate Verticals Healthcare Technology Oil & Gas Aerospace & Defense Franchise Finance Products Loans and Deposits Capital Markets Global Markets M&A Advisory Treasury Solutions E
Slide 5: Aiming for Excellence
Aiming for Excellence To help our customers, colleagues and communities reach their potential Objective is to be a top-performing bank that delivers well for all stakeholders Committed to excellence in every dimension Focused on long-term franchise value and consistent delivery of earnings growth an
Slide 6: Key messages
Key messages Continued investments in our future Continuous improvement mindset Significant investments in new technologies, seamless integration of digital and physical distribution and customer experience Enhancing data analytics to target household growth in mass affluent/ affluent segments Accel
Slide 7: Consumer Banking – highlights
Deposit growth outpacing loans(2) ~10% Consumer Banking – highlights Continued investments in broadening our capabilities are driving strong financial results Enhanced fee income capabilities in Mortgage and Wealth Loan growth in higher-return categories such as education and unsecured lending Consi
Slide 8: Consumer Banking – enhancing our platform
Consumer Banking – enhancing our platform Recognition(1) Enhancements Partnerships Ranked #1 Enhanced digital capabilities with Citizens Access®; raised $4.6 billion nationally as of 1Q19 Created top-15 bank owned mortgage servicer & originator(2) with $89.3 billion servicing portfolio as of 1Q19 Au
Slide 9: Investing in data analytics
Current 2020-2025 2015 launch of data analytics-optimized CD direct mail program resulted in six-fold increase in incremental deposits with a 75% decrease in cost to acquire(1) Investing in data analytics People-based targeting Predictive targeting Since 2015, have invested significantly to enhance
Slide 10: Continue to improve primacy in targeted segments
Continue to improve primacy in targeted segments 464 474 500 522 Mass affluent, affluent and HNW primary households with loan/investments(1) In thousands +12% Serve ~1 million HNW/Affluent/Mass Affluent primary households, up 11% from 2015, including 522K with a loan or investment, up 12% Launched P
Slide 11: Customer journeys: resolving pain points and simplifying experiences
Welcome to the Bank Help me resolve my problems Keep me safe from fraud Help me buy a home Leveraging “Voice of the Customer” data to prioritize top pain points Increasing focus on self-service and process automation improvements Enabling foundational enterprise-wide and cross-journey experiences ~1
Slide 12: Evolving our integrated distribution & advice model
Evolving our integrated distribution & advice model Presence Capabilities Efficiency Transforming ~40% of branch network by 2021; ~70 consolidations over the next three years Increasing brand awareness through branch modernization and new banking and wealth centers Strategically deploying high-visib
Slide 13: Focus on driving increased digital engagement
Focus on driving increased digital engagement Increasing digital engagement drives higher customer satisfaction and profitability Targeting launch of enhanced digital platform in 4Q19 New architecture expected to provide multiple benefits Offer a seamless experience across all digital channels Highl
Slide 14: Expanding our Wealth platform and mortgage
Financial advisors up ~30% since 2015 to ~420 Augmented Wealth multi-segment advisory platform with Clarfeld acquisition Enhanced focus on managed money products with annuity-like fee base Launched access to Strategic and Tactical Allocation Risk (STAR) portfolios to Affluent & Mass Affluent clients
Slide 15: Building lending capabilities
Home equity line of credit originations(1,2) $ billions Education originations(1) Consumer unsecured portfolio originations(1,3) $1.5 $1.9 ~30% ~36% Launched merchant-finance product in 3Q15; high-quality portfolio with loss-sharing agreements Several merchant partnerships in the pipeline Merchant p
Slide 16: Strong progress in growing lower-cost deposits
Strong progress in growing lower-cost deposits Strategies to grow deposits cost-effectively Focused on growing lower-cost deposits ~6% CAGR Continued opportunity to improve mix towards DDA and lower-cost categories Targeting primary household growth in Affluent/ Mass Affluent segments Continue to en
Slide 17: Retail loan performance
1.03% 0.70% 0.58% 0.53% 0.47% 0.48% Retail loan performance Total retail loss rate Optimizing mix with growth in higher-return categories such as education and unsecured lending while reducing lower-return auto Yields up, return on capital up, charge-off trend stable Expect average retail loss rates
Slide 18: Consumer Banking initiatives help drive enterprise performance
Consumer Banking initiatives help drive enterprise performance Tapping Our Potential (“TOP”) Balance Sheet Optimization (“BSO”) Loans Continue repositioning toward higher-return categories while maintaining stable stress losses Growing education & unsecured Strategic reduction of auto Identifying op
Slide 19: Key messages
Strong franchise with leading positions in attractive markets Continuing to grow more attractive risk-adjusted return portfolios and controlling deposit costs Consumer Banking’s strategy remains consistent & is helping drive strong overall CFG performance Focusing on data analytics, digital strategy
Slide 20: Appendix
Appendix Xx Citizens nancial Group,
Slide 21: Highly disciplined on credit: diversified and granular core loan mix
Highly disciplined on credit: diversified and granular core loan mix Super prime/prime-focused retail portfolio Core mortgage – FICO ~790; CLTV of ~60% Core home equity – FICO ~765; 53% 1st lien Auto – FICO ~730 Education lending – FICO ~780 Unsecured portfolio - FICO ~750 $2.0 billion credit card p
Slide 22: Notes
Notes General Notes References to net interest margin are on a fully taxable equivalent ("FTE") basis. In 1Q19, Citizens changed its quarterly presentation of net interest income and net interest margin (NIM). Consistent with our understanding of general peer practice, the Company simplified the cal
Slide 23: Notes, continued
Notes, continued Notes on slide 13– Focus on driving increase digital engagement New-to-bank digital engagement based on at least 1 digital transaction in 30-60 days after origination as a percentage of new-to-bank checking households originated. Digital categories include online/mobile bill pay, RD
Slide 24: Citizens Financial Group, Inc.
3* Citizens Financial Group, Inc.”
Citizens Financial Group — Deutsche Bank Global Financial Services Conference 2019 on 6ix