Citizens Financial Group, Inc. · NYSE:CFG
Citizens Financial — Barclays Americas Select Conference 2018
34 slides from Citizens Financial's conference presentation, May 15, 2018
Slide 1: Barclays Americas Select Conference 2018
Barclays Americas Select Conference 2018 John F. Woods Chief Financial Officer May 15, 2018
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 Loans and Leases Commercial In Footprint $111.4 billion(2) National Retail Deposit Services Coverage Mobile/Online Banking Commercial & Industrial Banking 55% Mortgage(1) 45% Commercial Real Estate Home Equity Loans/Lines Corporate Verticals Wealth Manageme
Slide 5: Strong execution and consistent progress
Strong execution and consistent progress Entering a new phase focused becoming a top-performing bank ROTCE(1) Medium-term Efficiency ratio(1) Medium-term (Return on average tangible common equity) target target ~13-15% mid-50%’s 68.5% 68.7% 67.6% 12.3% 11.7% 68.1% 63.9% 66.5% 7.7% 6.7% 6.7% 9.8% 63.
Slide 6: How we will stand out from the competition
How we will stand out from the competition Customer-centric focus reflecting: Expertise and deep knowledge of customers Strong High-quality advice Culture Team approach Insights from data analytics Selective in how and where we play Operating & Seeking to self-fund investments through ef
Slide 7: Medium-term targets
Medium-term targets Medium-term ROTCE outlook Medium-term targets ~1.3% ~(0.8)% ROTCE ~13-15% ~0.6% ~(1.1)% ~1.5% ~2.5% Efficiency ratio mid-50%’s ~14% ~10% CET1 ~10.0-10.25% FY 17 (1) (2) Revenue net Yield curve Efficiency Taxes Credit Capital net Medium-term (3) Dividend Underlying of required imp
Slide 8: Keys to delivering higher medium-term returns
Keys to delivering higher medium-term returns Tapping Our Potential Enterprise-wide initiatives to drive improvement in performance (“TOP”) and — Rigorous efficiency program to allow self-funding of investments Balance Sheet — Recycle capital into more accretive growth and relationship categories;
Slide 9: Opportunities to improve returns: TOP programs
Opportunities to improve returns: TOP programs Current TOP program targeting run-rate pre-tax benefit of ~$95-$110 million by end of 2018 Revenue initiatives Efficiency initiatives (examples) (examples) New channels: Digital as a sales engine, Organization simplification: Spans and direct to con
Slide 10: BSO: Rigorous program to improve returns while driving growth
BSO: Rigorous program to improve returns while driving growth 1Q18 YoY NIM expansion of 20 bps reflects 7 bps contribution from BSO efforts Assets Liabilities Investment portfolio Deposits Reinvest to support liquidity Optimize deposit loan mix with a focus Cash collateral management on lower-
Slide 11: Deposit cost growth remains in line with overall deposit growth
Deposit cost growth remains in line with overall deposit growth Deposit growth vs. Deposit cost growth (1Q18 vs. 3Q15) Consumer 30 bps R²= 0.70 Continuing to invest in data analytics CFG to drive personalized targeting across USB products Deposit cost growth KEY — Targeted branch, digital and 20 F
Slide 12: Citizens Access - a new direct-to-consumer digital channel
Citizens Access - a new direct-to-consumer digital channel The Citizens Access platform A nationwide direct-to-consumer platform for digitally-savvy consumers who value the flexibility and convenience of an online offering ─ Initially offering FDIC-insured online savings accounts and certificates
Slide 13: Citizens Access – A complement to Citizens' digital strategy
Citizens Access – A complement to Citizens’ digital strategy Platform to acquire growing segment of nationwide customers actively seeking to Gain access to do business with a digitally-led direct bank new customers Extends and diversifies Citizens’ deposit franchise using a lower-cost-to-serve a
Slide 14: Remain rate sensitive
Remain rate sensitive Interest rate sensitivity trend Highlights Net interest income positioned to continue to benefit from rising rates 6.0% ─ Our asset sensitivity has 5.5% 5.4% 5.1% 5.0% remained relatively stable at 5.0% 3.9% Given our current positioning, 25 bp 3.5% 3.2% 3.0% 3.1% increase
Slide 15: Plans to adjust capital structure but remain above peers
Plans to adjust capital structure but remain above peers Common equity tier 1 comparison(1) Highlights Strong CET1 capital position relative to peers CMA 11.7% ─ Expect annual normalization of ~40 bps given both CFG 11.2% capital return and strong loan growth ─ Expect peers to move towards 8%–10%
Slide 16: Further opportunities to improve returns: Growth in fee income businesses
Further opportunities to improve returns: Growth in fee income businesses Fee Income Consumer Commercial Wealth Capital & Global Markets Investments in FCs and sales, technology Broaden capabilities in DCM, M&A, CRE platforms and products with shift toward managed money New FX options/currency
Slide 17: Building an ecosystem of FinTech partnerships to accelerate our path to market
Building an ecosystem of FinTech partnerships to accelerate our path to market Launched innovative solutions and new Investing in additional capabilities that leverage capabilities that offer flexibility and speed for FinTech relationships our customers Selected examples Selected examples New digita
Slide 18: Delivering for our customers
Delivering for our customers Ranked #1 in Temkin Citizens Bank awarded Best Zelle®, our P2P payments Customer Experience for Treasury and Cash system launched in U.S. Banks(1) Management provider for December registered more the Northeast, Mid-Atlantic than 100,000 Citizens and Midwest regions custo
Slide 19: Citizens has delivered consistent EPS growth
Citizens has delivered consistent EPS growth…. $1.35 $0.85 $0.88 $0.92 $0.78 $0.61 $0.63 $0.68 $0.56 $0.55 $0.41 $0.46 $0.71 $0.52 $0.57 consensus estimates(3) 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18E 3Q18E 4Q18E CFG GAAP EPS CFG Adjusted/Underlying EPS(2) …though valuation has fallen off
Slide 20: Key messages
Key messages Solid franchise with leading positions in attractive markets Achieved IPO-based objectives and elevated our targets Citizens results highlight disciplined execution and continued momentum Robust balance sheet position ─ Credit quality and key coverage metrics remain strong ─ Rem
Slide 21: Appendix
** Citizens Financial Group, Inc.” 1
Slide 22: Our vision and credo guide us
Our vision and credo guide us Mission To help our customers, colleagues and communities reach their potential To be a top-performing bank distinguished by its customer-centric culture, mindset Vision of continuous improvement and excellent capabilities We perform our best every day so we can do more
Slide 23: Making consistent progress against our financial goals
Making consistent progress against our financial goals Medium-term Key Indicators targets 10.1% 10.4% 11.7% ~13 - 15% Adjusted/ 7.3% 8.0% 8.4% 9.0% 9.6% Underlying 6.3% 6.2% 6.8% 6.7% 6.7% 6.6% 6.8% 6.6% 4.3% 5.2% 5.2% ROTCE(1) Adjusted/ Underlying 68% 69% 70% 68% 68% 67% 68% 67% 66% 66% 66% 65% eff
Slide 24: Delivered attractive balance sheet and revenue growth in 1Q18
Delivered attractive balance sheet and revenue growth in 1Q18 1Q18 vs. 1Q17 A strong platform well-positioned to drive value Strong loan growth Revenue growth Higher NIM expansion (Average total loan growth) (Total revenue growth) (Net interest margin change) 2.8% ` 7.2% vs Peers vs Peers vs Peers 5
Slide 25: With continued focus on expense control and improving returns
With continued focus on expense control and improving returns 1Q18 vs. 1Q17 Well-controlled expenses; Positive operating leverage Efficiency improvement (YoY Positive operating leverage(1)) (Efficiency ratio(1) change) investing for growth (Noninterest expense change) vs Peers vs Peers CFG Peer aver
Slide 26: Citizens Access – Consumers rapidly adopting digital/direct platforms
Citizens Access – Consumers rapidly adopting digital/direct platforms Direct Bank market growing in absolute terms and as % of total deposits(1) Direct Banks $2.0T $3.8T CAGR Direct Banks 3% Digital/Direct is the fastest growing channel in 19% 18% the industry ─ Direct bank retail deposits grew at
Slide 27: Citizens Access expands distribution to reach new customers
Citizens Access expands distribution to reach new customers Citizens Access provides a winning combination of simplicity, security and attractive rates Target customer Profile: Opportunistic and digitally-savvy, affluent or mass-affluent consumers, large balances ($75k-$100K) Preferences: Opport
Slide 28: Future oriented digital services and technology platforms
Future oriented digital services and technology platforms Building capabilities to better serve our customers Modernize Strategic Data analytics Adaptive Security Platforms Minimize manual processes; Enabling a data environment Prepare for emerging Partners & FinTechs to threats through truste
Slide 29: Key performance metrics, Non-GAAP financial measures and reconciliations
Appendix / Key performance metrics, Non-GAAP financial measures and reconciliations 29
Slide 30: Key performance metrics, Non-GAAP financial measures and reconciliations
Key performance metrics, Non-GAAP financial measures and reconciliations $s in millions, except share, per share and ratio data 30
Slide 31: Key performance metrics, Non-GAAP financial measures and reconciliations
Key performance metrics, Non-GAAP financial measures and reconciliations $s in millions, except share, per share and ratio data 31
Slide 32: Key performance metrics, Non-GAAP financial measures and reconciliations
Key performance metrics, Non-GAAP financial measures and reconciliations $s in millions, except share, per share and ratio data 32
Slide 33: Key performance metrics, Non-GAAP financial measures and reconciliations
Key performance metrics, Non-GAAP financial measures and reconciliations $s in millions, except share, per share and ratio data 33
Slide 34: Citizens Financial Group, Inc.
3« Citizens Financial Group, Inc.”
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