Citizens Financial Group, Inc. · NYSE:CFG
Citizens Financial — Credit Suisse 2015 Financial Services Forum
32 slides from Citizens Financial's conference presentation, Feb 10, 2015
Slide 1: Credit Suisse 2015 Financial Services Forum
Credit Suisse 2015 Financial Services Forum February 10, 2015 Bruce Van Saun Chairman and Chief Executive Officer
Slide 2: Forward-looking statements and Non-GAAP financial measures
Forward‐looking statements and Non‐GAAP financial measures Forward‐Looking Statements 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
Slide 3: Citizens: Building a top-performing regional bank
Citizens: Building a top‐performing regional bank HOW Ch ti a clear Charting l course … d delivering li i ffor our stakeholders t k h ld 2
Slide 4: Citizens: Building a top-performing regional bank – Who
Citizens: Building a top‐performing regional bank Citizens went public on September 24, 2014 Who 70.5% owned by RBS with plan for full divesture by YE 2016 Who are we? What Where When How 3
Slide 5: Solid franchise with leading positions in attractive markets
Solid franchise with leading positions in attractive markets Retail presence in 11 states Dimension(2) Rank (3) Top 5 deposit market share in 9 of 10 largest MSAs(1) Assets ‐ $132.9 billion #13 Loans ‐ $93.4 billion #13 Deposits ‐ $95.7 billion #14 National Rochester, NY: #4 Branches ‐ ~1,200 #11 Ma
Slide 6: Balanced business mix
Balanced business mix Period‐end loans and leases(1) $74B 2009 $90B 2014 Commercial Commercial 36% 44% 56% 64% Consumer Consumer Targeting 50/50 mix over time 1. Reflects loans in our operating segments (Consumer Banking and Commercial Banking). Excludes Other segment, which includes 5 Non‐core loan
Slide 7: Strong, clean balance sheet funded with low-cost deposits
Strong, clean balance sheet funded with low‐cost deposits Well capitalized with a 4Q14 Tier 1 common equity ratio of 12.4%; pro forma common equity Tier 1 ratio of 12.1% on a fully phased‐in Basel III basis Solid asset quality performance with 2014 net charge‐offs of 36 bps Strong deposit fran
Slide 8: Robust product offerings with strong customer service
Robust product offerings with strong customer service Consumer Commercial Retail deposit services Corporate banking Mobile/online banking Commercial real estate Deep client Extensive Credit/debit card relationships p + product set p Franchise finance Wealth W lth managementt Asset fi
Slide 9: Strong and experienced Board & Leadership team
Strong and experienced Board & Leadership team Leadership Team Member Title Board Member Committees Bruce Van Saun Chairman and Chief Executive Officer Bruce Van Saun Chairman and Chief Executive Officer Vice Chairman and Head of Citizens Lead Director; Chair of Compensation and David Bowerman Busin
Slide 10: Citizens: Building a top-performing regional bank – What
Citizens: Building a top‐performing regional bank Citizens went public on September 24, 2014 Who 70.5% owned by RBS with plan for full divesture by YE 2016 Who are we? What is the vision for Citizens? What What are the strategy and key priorities? What are the keyy financial targets? g W
Slide 11: Aspire to be a top-performing regional bank, delivering well for all stakeholders
Aspire to be a top‐performing regional bank, delivering well for all stakeholders Colleagues Offer fulfilling jobs Regulators Investors Comply with Deliver letter and Customers C t strong value spirit of rules Serve our proposition and customers well and regulations attractive returns Communities &
Slide 12: Our vision and strategy
Our vision and strategy Our objective b is to be b a top‐performing f regionall bank b k that h delivers d l wellll for f our stakeholders k h ld Our vision is to deliver the best possible banking experience Our strategy to achieve this is to: Offer our customers a differentiated customer experien
Slide 13: Our strategy results in six priorities
Our strategy results in six priorities Position Consumer Banking to deliver improved capabilities and profitability ─ Re‐energize household growth and deepen relationships through cross‐sell ─ Scale up growth in consumer asset businesses ─ Move towards smaller branch formats with fewer, but more p
Slide 14: These priorities have been mapped to specific initiatives
These priorities have been mapped to specific initiatives Improved Balance Sheet Growth/ Continued Commercial Consumer Capital Mix Momentum Bank Normalization Reenergize Household growth Build out Mid‐Corporate & Target 7 – 8% loan growth Grow Auto Specialty verticals Complete $750 million
Slide 15: We target a 10%+ run-rate ROTCE by the end of 2016
We target a 10%+ run‐rate ROTCE by the end of 2016 End 2016 Key Indicators 2011 2013(1) 2014 4Q14 Targets Return on average tangible 4.2% 4.9% 6.7% 6.1% Future common equity ("ROTCE")(2) 10%+ target Adjusted ROTCE(2)(3) 4.5% 5.1% 6.1% 6.8% 12%+ Return on average total 0.4% 0.6% 0.7% 0.7% 1.0%+ tangi
Slide 16: Citizens: Building a top-performing regional bank – Where
Citizens: Building a top‐performing regional bank Citizens went public on September 24, 2014 Who 70.5% owned by RBS with plan for full divesture by YE 2016 Who are we? What is the vision for Citizens? What What are the strategy and key priorities? What are the keyy financial targets? g
Slide 17: We have made choices on where we will focus
We have made choices on where we will focus Customers Geography Business We will concentrate on Consumer Return on Average Tangible opportunities in our current Common Equity > 10% Target: 50% of revenue footprint Focus on customer segments TTarget: t ~75%+ 75% off revenue Ability to gain ma
Slide 18: Capital allocation focused on maximizing growth and returns
Capital allocation focused on maximizing growth and returns 4Q14 Balances B l Emphasize risk‐adjusted $92.0 Billion $106.0 Billion returns in allocating capital Other 5% Treasury/Non-Core 11% Treasury/Non-Core Focus on acquiring and Other Commercial d deepening i customer Asset Finance Other Com
Slide 19: Citizens: Building a top-performing regional bank – When
Citizens: Building a top‐performing regional bank Citizens went public on September 24, 2014 Who 70.5% owned by RBS with plan for full divesture by YE 2016 Who are we? What is the vision for Citizens? What What are the strategy and key priorities? What are the keyy financial targets? g
Slide 20: Plan spans three years to end of 2016; tracked well in 2014
Plan spans three years to end of 2016; tracked well in 2014 Targets progressed as planned in 2014 2014 Operating Plan Net interest income High‐ single‐digit growth Loan portfolio Mid‐ single‐digit growth Credit quality 35‐45 bps of net charge‐offs Efficiency ratio <70% Loan‐to‐deposit ratio
Slide 21: External factors broadly consistent except for rates
External factors broadly consistent except for rates Current view External Factors entering 2015 Interest Rates Macro Housing Market Environment Overall health of consumer Competitive hiring market Competitor Easing competitor credit pricing and discipline Actions Investment in
Slide 22: Initiatives broadly on track
Initiatives broadly on track 2014 Status 2015 INITIATIVE CFG Market O Commentaryy Outlook tl k Execution Condition Arrested household decline with new offerings. Contending with 1 Reenergize household growth competition and reduced foot traffic. Key is training/improved lead generation. Achieved 201
Slide 23: We are focused on fully meeting regulatory expectations
We are focused on fully meeting regulatory expectations Step‐change improvement in CCAR capabilities – Integrated g capital p planning p g – Deepened expertise in stress testing and modeling Significant g progress p g in remediatingg regulatory g y issue backlog, g, though more to do Strengthe
Slide 24: Getting to top performing
Getting to top performing We have a clear plan with rolling objectives for each stakeholder Achieve current targets, then raise the bar Investors Strive for consistency in performance, limit tail risk Target relatively high pay pay‐out out ratio ratio, steady and growing dividend Continue to
Slide 25: Citizens: Building a top-performing regional bank – How
Citizens: Building a top‐performing regional bank Citizens went public on September 24, 2014 Who 70.5% owned by RBS with plan for full divesture by YE 2016 Who are we? What is the vision for Citizens? What What are the strategy and key priorities? What are the keyy financial targets? g
Slide 26: Key to execution is the quality of our talent and instilling the right culture
Key to execution is the quality of our talent and instilling the right culture People Culture To achieve this we need to continue to hire, Culture is focused on: develop, and retain the right talent ─ Customer Focused on strengthening the leadership of the organization ─ Leadership ─ Over 18 m
Slide 27: How will we deal with the myriad of challenges we face?
How will we deal with the myriad of challenges we face? Driving balance sheet growth in areas that provide the most Low‐rate attractive returns environment Remaining disciplined on pricing Increasing focus on fee‐generating businesses Leading with our value proposition rather than price: ─ C
Slide 28: Investment Thesis
Investment Thesis 13thh largest U.S. retail bank holding company with attractive Attractive, demographics in core markets client‐centric Attractive business mix with growing and profitable commercial franchise with business complementing strong consumer business scale Client‐centric model focu
Slide 29: Q&A
3* Citizens Financial Group, Inc.” Q&A
Slide 30: Appendix
Appendix % Citizens 29 Financial Group, Inc.”
Slide 31: Non-GAAP Reconciliation Table
Non‐GAAP Reconciliation Table (Excluding restructuring charges and special items) $s in millions, except per share data FULL YEAR QUARTERLY 2011 2013 2014 4Q14 Net income (loss) (loss), excluding restructuring charges and special items: Net income (loss) (GAAP) $506 ($3,426) $865 $197 Add: Restructu
Slide 32: 3« Citizens
3« Citizens Financial Group, Inc.”
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