10-KPeriod: FY2018

CITIZENS FINANCIAL GROUP INC/RI Annual Report, Year Ended Dec 31, 2018

Filed February 21, 2019For Securities:CFGCFG-PHCFG-PECFG-PI

Summary

Citizens Financial Group, Inc. (CFG) reported solid financial performance for the year ended December 31, 2018, with net income of $1.7 billion, a 4% increase from the prior year, and diluted earnings per share of $3.52, an 8% increase. The company's strategy focuses on maintaining a high-performing, customer-centric organization, building excellent capabilities, and operating with financial discipline. Key business drivers included strong growth in net interest income, benefiting from higher loan yields and average loan growth, and a modest increase in noninterest income, partly due to acquisition contributions and growth in foreign exchange and trust services. Operationally, Citizens continues to streamline its structure, completing the consolidation of its banking subsidiaries into a single national bank, CBNA, on January 2, 2019. The company also maintained a strong capital position, with all regulatory capital ratios well above required minima. The efficiency ratio improved, and return on tangible common equity also saw an increase, reflecting the company's focus on operational efficiency and profitability. Looking ahead, the company's business strategy aims to drive sustainable growth through customer-centricity and enhanced capabilities, while navigating a competitive and evolving regulatory landscape.

Financial Highlights

42 data points
Beta

Revenue

$6.13B

Net Income

$1.72B

28.1% Net Margin

EPS (Diluted)

$3.52

Total Assets

$160.52B

Cash & Equivalents

$4.07B

Free Cash Flow

$1.53B

Financial Statements
Beta
Revenue$6.13B
Interest Expense$1.23B
Net Income$1.72B
EPS (Basic)$3.54
EPS (Diluted)$3.52
Shares Outstanding (Basic)478.82M
Shares Outstanding (Diluted)480.43M

Key Highlights

  • 1Net income of $1.7 billion in 2018, a 4% increase year-over-year, with diluted EPS of $3.52.
  • 2Total revenue grew 7% to $6.1 billion, driven by a 9% increase in net interest income.
  • 3Net interest margin improved by 17 basis points to 3.19%, benefiting from higher loan yields.
  • 4Average loans and leases increased by 4%, while average deposits also grew by 4%.
  • 5Noninterest expense increased 4%, with "underlying" noninterest expense up 4% when excluding notable items and acquisition costs.
  • 6Efficiency ratio improved to 59.1%, and return on average tangible common equity (ROTCE) was 12.9%.
  • 7Completed the consolidation of banking subsidiaries into a single entity, CBNA, on January 2, 2019.

Frequently Asked Questions

For the fiscal year ended December 31, 2018, Citizens Financial Group reported a net income of $1.7 billion, which represents a 4% increase from the prior year. Diluted earnings per share were $3.52, an 8% increase from $3.25 in 2017.

Total revenue for CFG increased by 7% to $6.1 billion in 2018, up from $5.7 billion in 2017. This growth was primarily driven by a 9% increase in net interest income, reaching $4.5 billion, and a 4% increase in noninterest income to $1.6 billion.

A significant operational change was the consolidation of its banking subsidiaries, Citizens Bank, N.A. and Citizens Bank of Pennsylvania, into a single subsidiary, Citizens Bank, N.A. (CBNA), which was completed on January 2, 2019. This move aimed to streamline governance, enhance risk management, and achieve operational efficiencies.

Noninterest expense increased by 4% to $3.6 billion in 2018. However, the company improved its efficiency ratio by 181 basis points to 59.1%, and its return on average tangible common equity (ROTCE) increased to 12.9% from 12.3% in 2017, indicating improved operational efficiency.