Citizens Financial Group, Inc. · NYSE:CFG
Citizens Financial — BofA Securities Future of Financial Services Conference 2020
22 slides from Citizens Financial's conference presentation, Nov 10, 2020
Slide 1: BofA Securities Future of Financial Services Conference 2020
BofA Securities Future of Financial Services Conference 2020 John F. Woods Vice Chairman and Chief Financial Officer Eric J. Schuppenhauer President of Consumer Lending and National Banking November 10, 2020
Slide 2: Forward-looking statements and use of non-GAAP financial measures
Forward-looking statements and use of non-GAAP financial measures Forward-Looking Statements. 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, as wel
Slide 3: Overview
Overview A more diversified business model helps us navigate through a challenging rate environment Self-help initiatives to improve profitability and capital efficiency ─ Investments in fee-generation capabilities Positioning Mortgage Banking to continue thriving even as rates rise ─ Balance Sheet
Slide 4: Significant progress in building a stronger and more diversified business model
Significant progress in building a stronger and more diversified business model $s in billions Underlying PPNR performance has strengthened(1,2) Key messages $2.7 Strong PPNR performance reflects an increasingly $2.6 $2.3 $2.3 diversified business model $1.9 ─ Multi-year investments in fee-generatio
Slide 5: Consumer Banking – strategic priorities
Consumer Banking – strategic priorities Consumer Banking priorities to drive future growth Digital-first Zero-based restructuring of customer journeys from E2E marketing through fulfillment front to back digital re-imagination Accelerating the repositioning of the distribution network transformation
Slide 6: Consumer lending – a powerful platform for growth in an ever-changing landscape
Consumer lending – a powerful platform for growth in an ever-changing landscape Major trends reshaping how we compete Accelerating digital adoption with COVID-19 Rising expectations for customer experience Rapidly increasing innovation in data and analytics Growing importance of scalability and effi
Slide 7: Consumer lending – developing relationships by serving customer needs
Consumer lending – developing relationships by serving customer needs(1) $s in billions National reach with scale, diversification and expertise unmatched in regional banking Retail ~50% of total CFG $124B loan portfolio at 9/30/20 Mortgage banking Auto Residential Servicing ~500K customers mortgage
Slide 8: Mortgage Banking – platform for fee growth and customer acquisition
Mortgage Banking – platform for fee growth and customer acquisition $s in billions Key strategic investments enabled us to build a strong Mortgage Banking business 2020 YTD originations ~$30 billion $103 billion servicing portfolio at 9/30/20 (1) (1) #7 ranked bank originator; #9 ranked bank service
Slide 9: Mortgage Banking – positioned for significant opportunities ahead
Mortgage Banking – positioned for significant opportunities ahead Continue to build digital-first origination process for Retail channel Deliver best-in- class digital Develop digital gateway for Wholesale to empower brokers experience while improving E2E digital transformation efficiencies Focus on
Slide 10: Mortgage Banking – continue to improve customer experience and efficiency
Mortgage Banking – continue to improve customer experience and efficiency E2E digitization effort well underway as part of TOP 6 Transformation Home Search Digital Application Digital Servicing Created partnership with Your Home Blend digital interface simplifies the Citizens Home Loan app allows ea
Slide 11: Mortgage Banking – expect to gain share even as rates rise
Mortgage Banking – expect to gain share even as rates rise $s in trillions Potential for >$3T mortgage market in 2021(1) Focused on taking share in the purchase market 60-75% of U.S. mortgages eligible for refi with meaningful Expect total market share to approach ~2% from 1%+ today benefit, i.e., >
Slide 12: Education lending – a distinctive area of lending strength
Education lending – a distinctive area of lending strength Leading education lending platform enables us to grow target customers A leader in education lending Positioning for the future Targeting emerging mass affluent customers with Launching new digital capabilities in 2021 to serve growing finan
Slide 13: Point-of-sale finance – capabilities well-established in a high growth market
Point-of-sale finance – capabilities well-established in a high growth market Millennials/Gen Z have strong preference for POS finance is growing much faster at a 20%+ fixed installment over credit cards(1)(1) CAGR than traditional unsecured lending(2) (2) $s in millions $1,444 CAGR Predictable Affo
Slide 14: Point-of-sale finance – fintech agility paired with the strength of a bank
Point-of-sale finance – fintech agility paired with the strength of a bank Strong momentum with recent partnerships and expansion into new areas Differentiated product and platform compared to Creating strategic programs and building unique fintech and large-issuer competitors experiences for mercha
Slide 15: Point-of-sale finance – continuing to innovate
Point-of-sale finance – continuing to innovate Leveraging deep POS expertise and innovation to build competitive advantage Next generation POS merchant Innovative customer Expansion into experiences analytics new opportunities Created altogether new products Data-driven underwriting provides Consume
Slide 16: Wrapping up
Wrapping up Well positioned to drive growth given unique national product offering and attractive footprint ~2.4 million lending Deposits from customers within all 50 states regional footprint Over 5 million retail lending customers across all 50 states CFG Corporate Headquarters - Providence, RI CF
Slide 17: Appendix
Appendix 3* Citizens Financial Group, Inc.” 17
Slide 18: Retail credit quality update
Retail credit quality update 9/30/2020 Retail credit generally performing well Past Due reflecting our focus on super- Current- 90 or Retail portfolio 30-59 60-89 prime/prime customers 29 More % of outstanding Forbearance rates down from 6.0% at Residential mortgages 98.96 % 0.33 % 0.08 % 0.63 % 6/3
Slide 19: Notes
Notes Notes on Non-GAAP Financial Measures See important information on 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 their reconciliations to GAAP financial measures. “Unde
Slide 20: Non-GAAP financial measures and reconciliations
Non-GAAP financial measures and reconciliations $s in millions, except share, per share and ratio data FOR THE NINE MONTHS ENDED SEPTEMBER 30, FULL YEAR 2020 2019 2018 2017 2016 2015 Total revenue, Underlying: Total revenue (GAAP) A $5,198 $6,491 $6,128 $5,707 $5,255 $4,824 Less: Special items — — —
Slide 21: Non-GAAP financial measures and reconciliations
Non-GAAP financial measures and reconciliations $s in millions, except share, per share and ratio data FOR THE NINE MONTHS ENDED SEPTEMBER 30, FULL YEAR 2020 2019 2018 2017 2016 2015 Net income available to common stockholders, Underlying: Net income available to common stockholders (GAAP) E $526 $1
Slide 22: Citizens Financial Group, Inc.
3* Citizens Financial Group, Inc.”
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