Citizens Financial Group, Inc. · NYSE:CFG
Citizens Financial — Barclays Global Financial Services Conference 2016
33 slides from Citizens Financial's conference presentation, Sep 14, 2016
Slide 1: Barclays Global Financial Services Conference
Barclays Global Financial Services Conference Bruce Van Saun Chief Executive Officer September 14, 2016
Slide 2: Important Information and GAAP/Non-GAAP Information
Important Information and GAAP/Non‐GAAP Information 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. These statements often include the words
Slide 3: Solid franchise with leading positions in attractive markets
Solid franchise with leading positions in attractive markets Retail presence in 11 states Dimension Rank(2) Top 5 deposit market share in 9 of 10 largest MSAs(1) Assets: $145.2 billion #13 Loans: $103.6 billion #11 Deposits: $106.3 billion #12 Manchester, NH: #1 Rochester, NY: #4 Branches: 1,200 #12
Slide 4: Strong, clean balance sheet funded with low-cost deposits
Strong, clean balance sheet funded with low-cost deposits Well capitalized with a common equity tier 1 capital ratio of 11.5%(1) on a fully phased-in Basel III basis Strong asset quality performance with net charge-offs of 25 bps(2) in 2Q16 Robust deposit franchise with $86.5 billion of core d
Slide 5: Robust product offerings and balanced business mix
Robust product offerings and balanced business mix Consumer Commercial Retail Deposit Services Corporate Banking Mobile/Online Banking Commercial Real Estate Credit/Debit Card Deep client Extensive Franchise Finance Wealth Management + relationships product set Asset Finance Home E
Slide 6: Strong and experienced board & leadership team
We are led by a strong and experienced board & leadership team Since January 2015, have attracted or promoted from within ~30% of our Executive Leadership Group (top 135) Leadership Team Member Title Board Member Committees Bruce Van Saun Chairman and Chief Executive Officer Bruce Van Saun Chairman
Slide 7: Aspire to be a top-performing regional bank
Aspire to be a top-performing regional bank, delivering well for all stakeholders Colleagues Regulators Customers Investors Communities & Society Customer-centric culture 6
Slide 8: Good execution of plan is driving balance sheet and revenue momentum
Good execution of plan is driving balance sheet and revenue momentum 2Q16 vs. 2Q15 A strong platform well positioned to drive value Strong loan growth Growing revenues faster Higher NIM expansion (Average total loan growth) (Revenue growth(1,2)) (Net interest margin change) 7.4% 475 bps 7.1% above p
Slide 9: Positive operating leverage and improving returns
With continued focus on positive operating leverage and improving returns 2Q16 vs. 2Q15 Well-controlled expenses; Strong operating leverage Efficiency improvement (YoY Adjusted Operating Leverage(1,3)) (Adjusted efficiency ratio(1,3) change) investing for growth (Adjusted noninterest expense(1,2) ch
Slide 10: We are focused on continuous improvement
We are focused on continuous improvement Heighten focus on end-to-end customer experience Delivering for the Further improve segment value propositions and how colleagues deliver customer against them Increase customer retention through targeted strategies Continue to enhance product offerin
Slide 11: Making steady progress without rate hikes
We are making steady progress without rate hikes Medium- term 7.30% target 6.76% 6.73% 6.67% 6.60% 6.75% 6.61% Key points 6.28% 6.22% 5.24% 5.24% 10% + Capturing revenue ROTCE Adjusted 4.34% potential of ROTCE(1) franchise Using strong 70% balance sheet and Efficiency 69% 68% 68% 68% 67% 68% tar
Slide 12: Consumer Banking
Consumer Banking $s in billions Growth driven by strong loan growth, NIM expansion, and investment in talent, infrastructure, product and advisory capabilities Strong loan growth Growth rate Delivering on a multi-year targeted growth strategy $50.7 $51.6 $52.5 $53.5 $54.0 8.7% – Continuing to leve
Slide 13: Consumer Banking focused on personalizing products and services
Consumer Banking focused on personalizing products and services Pre-Mass & Mass Affluent Affluent High Net Worth Mass Liquid Assets(1) Below $100K $100K-$500K $500K-$2MM $2MM-$25MM Est. U.S. HHs(2) 85MM (71%) 23MM (19%) 10MM (8%) 2.5MM (2%) Citizens HHs(3) 1.28MM (48%) 771K (30%) 462K (18%) 106K (4%
Slide 14: Strengthening wealth product capabilities and advice model
We are strengthening our wealth product capabilities and advice model Delivering an integrated banking and investing experience Expanding and strengthening the advisory model Enhancing the product suite Private Bank Portfolio Credit Mortgage – Private & Premier Wealth Senior Banker Manager Solutio
Slide 15: Commercial Banking – Solid track record of organic growth
Commercial Banking – Solid track record of delivering organic growth $s in billions Growth driven by robust loan and deposit growth, investment in talent, and broadening of capabilities Strong loan growth Delivering on a multi-year growth strategy Growth $46.1 rate – Focus on enhancing product and
Slide 16: Commercial Banking focused on delivering Great Banker experience
Commercial Banking focused on delivering “Great Banker” experience Developing strategies to improve our coverage model and interactions Optimizing the coverage model: ─ Differentiating mature versus emerging geographies ─ Centralized portfolio management to enhance efficiency ─ Rationalized RM/BDO
Slide 17: Commercial Banking focused on gaining lead relationships
Commercial Banking focused on gaining lead relationships and improving returns We have opportunity to increase lead bank …that results in much higher product penetration with new and existing clients… penetration and better returns Middle Market, 3+ Products Cross-Sold(1,2) MCIV role with 95% 91% Co
Slide 18: Modernizing our technology environment
Modernizing our technology environment has been a key focus Focus Areas Key Elements Benefits to Citizens Provide for open Reduces customization needed to interface Leverage architecture in Core banking with applications applications and other systems Unlocks shared data and functionality, tha
Slide 19: Enhancing our digital capabilities
Especially enhancing our digital capabilities Build digital-first, end-to-end customer experiences (‘moments of truth’) where we can differentiate Enhance digital platforms and address key mobile capabilities most important to our customers Deliver in a fast, agile, and iterative way Enable our coll
Slide 20: Self funding investments through efficiency initiatives
Self funding necessary investments through our efficiency initiatives Tapping Our Potential (TOP) programs driving revenue growth and efficiencies TOP II Program TOP III Program Launched mid 2015 — On track to deliver Launched mid 2016 — Targeted run-rate $95-$100 million annual pre-tax benefit by e
Slide 21: Invest while delivering positive operating leverage and growth
Committed to invest while delivering positive operating leverage and growth $ in millions Shifting investments toward future capabilities; Positive YoY operating leverage (%) (Adjusted revenue growth – Adjusted expense growth(1)) technology capital expenditures ~90% of technology capex - Technology
Slide 22: Prudently deploying excess capital to enhance returns
Prudently deploying excess capital to further enhance returns Capital normalization strategy represents prudent CET1 ratio of 11.5% versus 10.4% peer average offers CET1 glide path though still above peer targets significant flexibility Glide path down permits both strong loan growth and capital
Slide 23: Key messages
Key messages We have the foundation for a great franchise, and continue to deliver progress through strong execution of our turnaround strategy ─ Financial results continue to improve and meet expectations ─ Not waiting for rate hikes: results improving steadily without them ─ Good progress on str
Slide 24: Appendix
Appendix 3% Citizens Financial Group, Inc.” 23
Slide 25: Summary of progress on strategic initiatives
Summary of progress on strategic initiatives 2Q16 Initiative Commentary Status Retail checking HHs up QoQ and YoY with new checking HH first year attrition improvements. Deposits up 3% Reenergize household growth and services charges up 5% YoY. Application and origination volumes up 20% and 42% QoQ
Slide 26: Large wealth opportunity with focused strategy
Large wealth opportunity with focused strategy to pursue $s in billions Accelerate the growth of clients into our value proposition in order to deepen product penetration and share of wallet and drive fee income growth Strategy Opportunity to drive fee income growth (Wealth Fees/Earning Assets(1))
Slide 27: Continued growth opportunities in Capital Markets
Continued growth opportunities in Capital Markets Leveraging strong relationships and experienced team through solutions-based orientation and growing product and advisory capabilities Corporate Finance professionals key to supporting Capital and Global Markets fee income $s in millions solutions-
Slide 28: Treasury Solutions opportunity
Treasury Solutions opportunity Investing to drive continued revenue growth with focus on improving client penetration and market share Treasury Solutions fee income up ~7.7% YoY in 2015 with good Treasury Solutions Commercial Banking fees(2) $s in millions momentum vs. estimated 2015 industry grow
Slide 29: Non-GAAP reconciliation table
Non-GAAP reconciliation table FOR THE QUARTER FOR THE QUARTER $s in millions ENDED JUNE 30, ENDED JUNE 30, 2016 Change 2016 2015 from 2015 Noninterest income, excluding special items: Noninterest income (GAAP) $355 $360 Less: Special items — — Noninterest income, excluding special items (non-GAAP) $
Slide 30: Non-GAAP reconciliation table
Non-GAAP reconciliation table $s in millions FOR THE QUARTER FOR THE QUARTER ENDED JUNE 30, ENDED JUNE 30, 2016 2015 Tangible book value per common share: Common shares - at end of period (GAAP) K 529,094,976 Common stockholders' equity (GAAP) $19,979 Less: Goodwill (GAAP) 6,876 Less: Other intangib
Slide 31: Non-GAAP reconciliation table
Non-GAAP reconciliation table $s in millions, except per-share data FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER ENDED ENDED ENDED ENDED ENDED ENDED ENDE
Slide 32: Non-GAAP reconciliation table
Non-GAAP reconciliation table $s in millions, except per-share data FOR THE FOR THE FOR THE FOR THE FOR THE QUARTER QUARTER QUARTER QUARTER QUARTER ENDED ENDED ENDED ENDED ENDED JUNE 30, MARCH 31, DECEMBER 31, SEPTEMBER 30, JUNE 30, 2016 2016 2015 2015 2015 Commercial Segment Total revenue (GAAP) U
Slide 33: Citizens Financial Group, Inc.
3< Citizens Financial Group, Inc.”
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