Citizens Financial Group, Inc. · NYSE:CFG
Citizens Financial — BancAnalysts Association of Boston Conference 2018
24 slides from Citizens Financial's conference presentation, Nov 8, 2018
Slide 1: BancAnalysts Association of Boston Conference
BancAnalysts Association of Boston Conference John F. Woods Chief Financial Officer Brendan Coughlin President of Consumer Deposits and Lending Beth Johnson Chief Marketing Officer and Head of Virtual Channels November 8, 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: Significant progress towards revised medium-term goals
Significant progress towards revised medium-term goals Focused on becoming a top-performing bank ROTCE(1) Medium-term Efficiency ratio(1) Medium-term (Return on average tangible common equity) target target 68.5% 68.7% 13.5% ~13-15% mid-50%’s 66.5% 9.8% 63.9% 6.7% 7.6% 60.0% 6.1% 4.3% 57.6% 3Q13(2)
Slide 4: Keys to delivering higher medium-term returns
Keys to delivering higher medium-term returns Balance Sheet Enterprise-wide initiatives to drive improvement in performance Optimization — BSO - Recycle capital into more accretive growth and relationship categories; (“BSO”) grow higher risk-adjusted return asset portfolios, optimize deposits and
Slide 5: BSO: Rigorous program to improve returns while driving growth
BSO: Rigorous program to improve returns while driving growth 3Q18 YoY NIM expansion of 15 bps reflects ~5 bps contribution from BSO efforts(1) Assets Liabilities Loan portfolio Deposits Reposition/optimize loan mix Optimize mix with focus on Reallocate capital within categories; lower-cost ca
Slide 6: Diversifying our portfolio towards higher-returning assets
Diversifying our portfolio towards higher-returning assets(1) $s in billions Strong overall portfolio growth with a focus on optimizing mix 3Q18 $112.2 billion Core retail loan portfolio core loan portfolio YoY Yield up 43 $57.7 $56.1 bps 20% 23% 16% 24% 21% 7% $54.5 $57.7 56% 56% 3% Core commerc
Slide 7: Re-balancing retail loan mix to drive improved risk-adjusted returns
Re-balancing retail loan mix to drive improved risk-adjusted returns Improved loan loss rates… … with attractive credit metrics(4) 2013 3Q18 YTD Super-prime and prime focused retail loan portfolio Loan Loss Loan Loss Core retail - FICO score of ~765 Mix(1) rate Mix(1) rate Core resi mortgage Core
Slide 8: Strong progress across key Consumer Banking deposit metrics
Strong progress across key Consumer Banking deposit metrics $s in billions Focused on growing lower-cost deposits(1) Strategies to grow deposits cost-effectively Continue to enhance product suite - improve individual products while building cross-product $40.2 $40.5 value propositions for targeted
Slide 9: TOP programs demonstrate our continuous improvement mindset
TOP programs demonstrate our continuous improvement mindset TOP IV actions largely complete; expected 2018 pre-tax benefit of ~$105-$110 million TOP V Program Targeting pre-tax benefit of ~$90-$100 million by end of 2019 Revenue initiatives Efficiency Initiatives New channels Organization simpli
Slide 10: Continued focus on closing fee income gap to peers
Continued focus on closing fee income gap to peers Significant opportunity to improve fee income, which is underweight relative to peers(1) Enhancing products, capabilities and expertise Consumer Commercial Investments in personnel plus sales, technology platforms and products with Broaden capab
Slide 11: Expanding Wealth Management – Clarfeld Financial Advisors Acquisition
Expanding Wealth Management – Clarfeld Financial Advisors Acquisition Clarfeld’s sophisticated high net worth and ultra-high net worth offerings augment existing multi-segment investment advisory platform Adds important scale with ~$6.6 billion in AUM with total combined AUM of $14.4 billion;(1) i
Slide 12: Appendix
Appendix 3% Citizens Financial Group, Inc.” "4
Slide 13: Year-over-year results
Year-over-year results Average loans(1) Average deposits Pre-provision profit $s in billions $s in billions $s in millions $663 Underlying $114.0 4% $112.9 $117.0 4% $109.5 $585 13% $654 12% 3Q17 3Q18 3Q17 3Q18 3Q17 3Q18 Net income available to Return on average total Return on average tangi
Slide 14: Diversified and granular loan mix
Diversified and granular loan mix $59.3 billion 3Q18 retail portfolio Non-core Other Out-of-footprint(1,2) Education InSchool Residential 23% 2% 5% 5% Mortgage Education Refi 14% Midwest (2) 9% 31% Credit Cards 3% (2) 39% Mid-Atlantic Indirect 21% Auto (2) 24% Home New England 24% Equity Weighted-
Slide 15: Core retail portfolio
Core retail portfolio Highlights 3Q18 $58.4 billion core retail portfolio(1) Weighted-average core FICO score of ~765 by Product type by Geography by refreshed FICO ~84% of the retail portfolio has a FICO score Other Mortgage Out-of-footprint of >700 New 800+ <600 Education 6% 3% 600-649 Core
Slide 16: Core mortgage portfolio overview
Core mortgage portfolio overview Highlights 3Q18 $18.4 billion core mortgage portfolio Jumbo mortgages originated primarily within by Refreshed CLTV (1) by Refreshed FICO (1) the Bank’s lending footprint < 600 600-649 Predominately in-footprint with a weighted- 90-100% 1% 4% 650-699 average refr
Slide 17: Core home equity portfolio
Core home equity portfolio(1) Highlights 3Q18 $12.8 billion HELOC 3Q18 $1.1 billion HELOAN 53% of the portfolio is secured by 1st lien by Lien position (2) by Lien position (2) Weighted-average FICO of ~765 94% has an LTV of less than 80% 2nd 1st 36% 3Q18 HELOC originations of $1.3 billion 5
Slide 18: Auto portfolio credit metrics
Auto portfolio credit metrics Highlights(1) 3Q18 $12.3 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 ~730 % new-car < 620 ~60% ≥ 120% < 80% 3Q18 originations of $1.2 billion with > 80
Slide 19: Core education finance portfolio overview
Core education finance portfolio overview Highlights 3Q18 $8.5 billion core education finance portfolio Core education finance portfolio weighted-average FICO (1) by Refreshed FICO by Segment (1) score of ~780 and co-sign rate of ~50% 96% of InSchool loans co-signed with weighted-average FICO Ed
Slide 20: Education refinance portfolio overview
Education refinance portfolio overview Highlights 3Q18 $5.7 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? 00 68% Education refinanc
Slide 21: Consumer unsecured
Consumer unsecured* Highlights 3Q18 $2.9 billion consumer unsecured portfolio* Launched merchant-partnership financing in 3Q15 $s in millions $2,950 Developing strategic partnerships designed around high-quality merchant partnership offerings $2,565 $2,241 $2,373 Partnerships utilize loss-shar
Slide 22: 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 21
Slide 23: 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 22
Slide 24: Citizens Financial Group, Inc.
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