Citizens Financial Group, Inc. · NYSE:CFG
Citizens Financial — Morgan Stanley Financials Conference 2018
27 slides from Citizens Financial's conference presentation, Jun 12, 2018
Slide 1: Morgan Stanley Financials Conference
Morgan Stanley Financials Conference June 12, 2018 Brad Conner Vice Chairman, Head of Consumer Banking
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. Statements regarding potential future share repurchases and future dividends are forward-lookin
Slide 3: Solid franchise with leading positions in attractive markets
Solid franchise with leading positions in attractive markets Franchise highlights Top 5 deposit market share in 9 of our 10 largest MSAs(1) #2 deposit market share in New England(2) Top-5 rank HELOC in 9/9 markets(3) CFG corporate headquarters Top-4 rank in Education(4) Providence, RI CFG br
Slide 4: Business Overview
Business Overview Consumer Commercial Loans and Leases In Footprint $111.4 billion(2) National Retail Deposit Services Coverage Mobile/Online Banking Commercial & Industrial Banking Mortgage(1) 55% Commercial Real Estate 45% Home Equity Loans/Lines Corporate Verticals Wealth Manageme
Slide 5: Key Messages – Consumer Banking
Key Messages – Consumer Banking Using segmentation strategies to drive household growth, deepen & retain customer relationships ─ Leveraging data analytics to understand customer needs ─ Enhancing Mass Affluent & Affluent offerings ─ Improving customer acquisition & deepening through personalized
Slide 6: Our focus on customer experience is helping to drive strong growth
Our focus on customer experience is helping to drive strong growth Robust Consumer Banking loan growth(1) $ billions Recognitions $54.7 $58.0 Rank #1 2018 Celent Model Wealth $51.2 Temkin Customer Manager Platform Award Experience for U.S. for SpeciFi® Banks(2) 2015 2016 2017 Home Equity Auto Mortga
Slide 7: Data intelligence is driving an improved customer experience
Data intelligence is driving an improved customer experience Using data analytics to better reach customers & personalize their experiences Augmented Data Intelligence Platform Enhanced ability to service, identify Personalize & deliver delivery & customer or enhanced services & fulfillment prospect
Slide 8: Our strategy remains to focus on Mass Affluent and Affluent segments
Our strategy remains to focus on Mass Affluent and Affluent segments Growing overall HHs with a focus on our Strong progress driving Primary HHs with a target segments loan or investment(1) In thousands in thousands Affluent HH Client Penetration 48% 187 204 2,639 2,662 HNW 61 74 9% 527 572 +9% $64
Slide 9: Evolving our integrated distribution & advice model
Evolving our integrated distribution & advice model Aligning with customer opportunity & advancing trusted-advisor status Shifting network to advisory service model Transitioning to specialist model (FTEs)(1) Self & Assisted Service Future Self-service options & State advice interactions ~6,500 ~40%
Slide 10: Building lending capabilities
Building lending capabilities $ billions Home equity line of credit Education originations Consumer unsecured originations(1) portfolio originations(2) $2.2 0 $5.2 $5.5 40% $2.0 0 35% $1.9 $4.0 40% 0 30% $1.5 $1.2 25% 71% 0 75% 29% 20% 74% 0 60% 18% 15% 0 14% 71% 10% 26% 25% 29% 10% 5% 2015 2016 201
Slide 11: Re-balancing retail loan mix to drive improved risk-adjusted returns
Re-balancing retail loan mix to drive improved risk-adjusted returns Retail loan performance $ in billions 2013 2017 Loan Loss Loan Loss Mix(1) rate Mix(1) rate $57.0 $54.2 Core resi mortgage 18% 0.38% 28% 0.04% $51.3 $46.7 $48.1 98% Core home equity 44 0.66 27 0.13 97% Auto 19 0.06 24 0.80 95% 94%
Slide 12: Improving managed money and customer-investing capabilities
Improving managed money and customer-investing capabilities Improving investment sales mix Delivering innovative investment solutions to our customers $ billions 538 442 $3.2 $2.7 $2.5 38% +160% Investing in additional capabilities that 19% 26% leverage FinTech relationships 81% Launch of SpeciF
Slide 13: Improving scale - Franklin American Mortgage Company acquisition
Improving scale - Franklin American Mortgage Company acquisition Creates top-15 bank owned mortgage servicer & originator $ billions Mortgage servicing portfolio Servicing households MSR Fair Market Value(1) Off balance sheet $ millions $78.9 Off balance sheet 415,000 $809 $61.6 353,000 $550 $17.3 6
Slide 14: Robust deposit growth with continued pricing discipline & new digital channel
Robust deposit growth with continued pricing discipline & new digital channel Improving focus on more cost-effectively $ billions growing deposits(1) $16.0 Nationwide direct-to-consumer platform for $15.3 digitally savvy consumers who value the flexibility & convenience of an online offering $14.3
Slide 15: Consumer Banking customer journeys now underway
Consumer Banking customer journeys now underway Simple & fast account-opening experience 80% of customers with Welcome to Started with deposit products; expanding to all products/channels great checking opening the Bank experience are likely Reduces paper/calls, while driving primacy & higher
Slide 16: Consumer Banking initiatives help drive enterprise performance
Consumer Banking initiatives help drive enterprise performance Tapping Our Potential (“TOP”) Revenue initiatives Efficiency initiatives New channels: Digital as a sales engine, Organization simplification direct-to-consumer mortgage, call center Lean/process improvement ‘service to solutions’
Slide 17: Key messages – Citizens Bank
Key messages – Citizens Bank Consumer Banking’s strategy remains consistent & is helping drive strong overall CFG performance ─ Improving customer acquisition & deepening through personalized offers & experiences Evolving distribution channels to adapt to the changing banking landscape Capturi
Slide 18: Appendix
Appendix 3% Citizens Financial Group, Inc.” 48
Slide 19: Core retail portfolio
Core retail portfolio Highlights 4Q17 $57.4 billion core retail portfolio(1) Weighted-average core FICO score of 763 by Product type by Geography by refreshed FICO 65% of the retail portfolio has a FICO score Other Cards Mortgage Out of of >750 New 800+ <600 Education 5%3% Footprint England 36%
Slide 20: Core mortgage portfolio overview
Core mortgage portfolio overview Highlights 4Q17 $16.9 billion core mortgage portfolio Jumbo mortgages originated primarily within the by Refreshed CLTV (1) by Refreshed FICO (1) Bank’s lending footprint Predominately in-footprint with a weighted- 90-100% > 800 average refreshed FICO score of 78
Slide 21: Core home equity portfolio
Core home equity portfolio(1) Highlights 4Q17 $13.5 billion HELOC 4Q17 $1.4 billion HELOAN 53% of the portfolio is secured by 1st lien by Lien position (2) by Lien position (2) Weighted-average FICO of 767 93% has an LTV of less than 80% 2nd 1st 35% 4Q17 HELOC originations of $1.6 billion 52
Slide 22: HELOC payment shock management
HELOC payment shock management Highlights Maturing vintages as of December 31, 2017 Between 2018 – 2021, $3.2 billion in drawn balances ($3.7 2015 – $1.26 billion 2016 – $916 million 2017 – $1.09 billion billion of undrawn balances) are scheduled to mature, or 2% 3% 3% 2% 2% 3% 1% 3% 3% 23%, of th
Slide 23: Auto portfolio credit metrics
Auto portfolio credit metrics Highlights(1) 4Q17 $13.2 billion Auto portfolio Auto Finance portfolio – purchase only, no (2) by Refreshed FICO score (1,2) by Origination LTV leasing, weighted-average FICO score of 728 < 620 % new car ≥ 120% ≤ 80% 4Q17 originations of $1.4 billion with > 800 62%
Slide 24: Core education finance portfolio overview
Core education finance portfolio overview Highlights 4Q17 $7.9 billion core education finance portfolio Core education finance portfolio weighted-average FICO score (1) by Refreshed FICO by Segment (1) of 777 and co-sign rate of 46% 95% of InSchool loans co-signed with weighted-average FICO > 80
Slide 25: Education refinance portfolio overview
Education refinance portfolio overview Highlights 4Q17 $5.4 billion education refinance portfolio Education refinance product largely mitigates two greatest student by Portfolio lending risks: Citizens Did the borrower graduate? ERL Did the borrower gain employment? 64% Education refinance p
Slide 26: Consumer unsecured
Consumer unsecured* Highlights 4Q17 $2.2 billion consumer unsecured portfolio Launched merchant partnership financing in 3Q15 $s in millions $2,241 Developing strategic partnerships designed around high-quality merchant partnership offerings $1,691 $1,456 46% Partnerships utilize loss-sharing
Slide 27: 3< Citizens
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