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1. Company Snapshot

1.a. Company Description

Citizens Financial Group, Inc.operates as the bank holding company for Citizens Bank, National Association that provides retail and commercial banking products and services to individuals, small businesses, middle-market companies, corporations, and institutions in the United States.The company operates in two segments, Consumer Banking and Commercial Banking.


The Consumer Banking segment offers deposit products, mortgage and home equity lending products, credit cards, business loans, wealth management, and investment services; and auto, education, and point-of-sale finance loans, as well as digital deposit products.This segment serves its customers through telephone service centers, as well as through its online and mobile platforms.The Commercial Banking segment provides various financial products and solutions, including lending and leasing, deposit and treasury management services, foreign exchange, and interest rate and commodity risk management solutions, as well as syndicated loans, corporate finance, mergers and acquisitions, and debt and equity capital markets services.


This segment serves government banking, not-for-profit, healthcare, technology, professionals, oil and gas, asset finance, franchise finance, asset-based lending, commercial real estate, private equity, and sponsor finance industries.It operates approximately 1,200 branches in 14 states and the District of Columbia; 114 retail and commercial non-branch offices in national markets; and approximately 3,300 automated teller machines.The company was formerly known as RBS Citizens Financial Group, Inc.


and changed its name to Citizens Financial Group, Inc.in April 2014.Citizens Financial Group, Inc.


was founded in 1828 and is headquartered in Providence, Rhode Island.

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1.b. Last Insights on CFG

Citizens Financial Group's recent performance was driven by better-than-expected Q4 earnings, with net income of $528 million, up 32% year-over-year, and EPS of $1.13, up 36% year-over-year. The company's robust NII and fee income growth, along with strategic initiatives such as cost efficiencies, private banking, and capital markets expansion, are expected to drive double-digit core earnings growth. Analysts have boosted their forecasts following the strong Q4 results, and institutional investors, including Frontier Capital Management and Caxton Associates, have increased their stakes in the company.

1.c. Company Highlights

2. Citizens Financial Group's Strong Q4 and Full-Year 2025 Results Exceed Expectations

Citizens Financial Group, Inc. (CFG) reported a robust fourth-quarter and full-year 2025 performance, with notable highlights including a 7 basis point expansion in net interest margin (NIM) in Q4, driven by non-core run-off and reduced impact from terminated swaps. Net interest income increased 3% sequentially and 9% year-over-year, while fees rose 8% year-over-year, driven by record wealth and capital markets results. Earnings per share (EPS) was $1.13, surpassing estimates of $1.1, and representing an 8% sequential and 36% year-over-year increase. For the full year, EPS was $3.86, up 19% year-over-year.

Publication Date: Jan -22

📋 Highlights
  • Net Interest Margin Expansion:: Q4 NIM expanded 7 bps due to non-core run-off and terminated swaps, with 4-5 bps quarterly growth projected to reach 3.25% by 4Q26.
  • Fee Growth Momentum:: Fees rose 8% YoY in 2025, with guidance for 6-8% growth in 2026 driven by wealth and capital markets, including $20M in carryover fees.
  • Private Bank Performance:: Achieved 25% ROE, $7.2B in loans, and $10B in client assets, targeting $16-20B in client asset growth by 2026.
  • Shareholder Returns:: $700-850M in buybacks planned for 2026, maintaining a CET1 ratio of 10.5-10.6% amid $450M pretax benefits from "Reimagine the Bank" by 2028.
  • Operating Leverage:: 2026 projects over 500 bps of operating leverage with 10-12% NII growth and 4.5% expense growth, supporting 16-18% ROTCE and 10% top-line growth.

Segment Performance and Outlook

The private bank finished the year with $4.145 billion in deposits, $10 billion in client assets, and $7.2 billion in loans, achieving 7% accretion to pretax income and a 25% return on equity (ROE). CFG made significant progress in running down non-core assets from $6.9 billion to $2.5 billion. For 2026, CFG expects strong revenue performance, controlled expenses, and significant positive operating leverage, with projected NII growth of 10-12%, driven by NIM expansion and solid loan growth.

Valuation and Key Metrics

CFG's current valuation metrics, including a Price-to-Tangible Book Value (P/TBV) ratio, should be analyzed to understand what's priced in. With a 'P/E Ratio' of 15.09, 'P/B Ratio' of 1.05, and 'Dividend Yield (%)' of 2.68, CFG appears reasonably valued. Analysts estimate next year's revenue growth at 7.2%, indicating a positive outlook. The company's "Reimagine the Bank" initiative aims to drive long-term success through innovative technologies and a simplified business model, targeting $450 million in pretax run rate benefits by 2028.

Growth Initiatives and AI Investments

CFG is investing heavily in AI development, focusing on foundational elements such as data and infrastructure, with use cases including call center automation and credit risk assessment. The private bank is expected to grow client assets by $16-20 billion, primarily from existing customers and some new ones. The company expects to continue growing through organic growth opportunities, with a focus on the private bank and "Reimagine the Bank" initiatives.

Outlook and Conclusion

CFG's medium-term outlook includes a 16-18% ROTCE target, with the private bank expected to contribute significantly to earnings growth. The company's disciplined approach to implementing the "Reimagine the Bank" program, with 50 work streams and a transformation office tracking progress, is expected to drive long-term success. With a strong CET1 ratio of 10.5-10.6% expected by the end of 2026, CFG is well-positioned for continued growth and returns to shareholders.

3. NewsRoom

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Channing Capital Management LLC Takes Position in Citizens Financial Group, Inc. $CFG

Feb -22

Source: defenseworld.net

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Aberdeen Group plc Sells 11,217 Shares of Citizens Financial Group, Inc. $CFG

Feb -19

Source: defenseworld.net

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Citizens Financial Strengthens Advisory Platform With Matrix Deal

Feb -18

Source: zacks.com

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Citizens Financial Group Adds to Advisory Capabilities with Acquisition of Matrix Capital Markets Group

Feb -17

Source: businesswire.com

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Citizens Financial Group Touts Transaction-Driven 2026-27 Outlook as Commercial Bank Expands

Feb -17

Source: defenseworld.net

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Citizens Financial Group, Inc. (NYSE:CFG) Short Interest Down 14.8% in January

Feb -16

Source: defenseworld.net

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Caprock Group LLC Makes New Investment in Citizens Financial Group, Inc. $CFG

Feb -15

Source: defenseworld.net

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Citizens Financial Group, Inc. Declares Dividends on Preferred Stock

Feb -11

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.74%)

6. Segments

Consumer Banking

Expected Growth: 6.5%

Citizens Financial Group, Inc.'s 6.5% growth in Consumer Banking is driven by increasing deposit growth, expansion of digital banking capabilities, and strategic partnerships. Additionally, the segment benefits from a strong brand presence, diversified product offerings, and a focus on customer experience. Furthermore, the company's investments in data analytics and risk management have improved operational efficiency, contributing to the segment's growth.

Commercial Banking

Expected Growth: 7.2%

Citizens Financial Group's 7.2% commercial banking growth is driven by strategic acquisitions, expansion of treasury management services, and increased lending to middle-market businesses. Additionally, investments in digital platforms and data analytics have enhanced customer experience, leading to increased deposits and fee income. A favorable interest rate environment and strong credit quality have also contributed to the segment's growth.

Non-Core

Expected Growth: 5.8%

Citizens Financial Group's Non-Core segment growth of 5.8% is driven by strategic divestitures, improved risk management, and a favorable interest rate environment. Additionally, the segment benefits from a decline in legacy assets, reduced operating expenses, and a focus on higher-return businesses.

Other

Expected Growth: 6.0%

Citizens Financial Group's 6.0% growth in 'Other' segment is driven by increasing fee income from treasury services, commercial card, and merchant services. Additionally, growth in commercial loan balances and higher interest rates contribute to the segment's expansion. Furthermore, the company's strategic investments in digital capabilities and customer experience enhancements also support this growth.

7. Detailed Products

Consumer Banking

Provides personal banking services, including checking and savings accounts, credit cards, personal loans, and mortgages.

Commercial Banking

Offers cash management, lending, and trade finance solutions to small businesses, middle market companies, and large corporations.

Corporate Banking

Provides treasury management, lending, and risk management solutions to large corporations and institutions.

Wealth Management

Offers investment management, brokerage, and wealth planning services to individuals, families, and institutions.

Mortgage Banking

Provides residential mortgage lending and servicing to individuals and investors.

Student Lending

Offers private student loans and refinancing options to students and families.

8. Citizens Financial Group, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Citizens Financial Group, Inc. operates in a highly competitive industry, but the threat of substitutes is mitigated by the complexity and specialization of financial services.

Bargaining Power Of Customers

Citizens Financial Group, Inc. has a large customer base, but customers have significant bargaining power due to the ease of switching to competitors.

Bargaining Power Of Suppliers

Citizens Financial Group, Inc. has a diverse supplier base, and suppliers have limited bargaining power due to the company's scale and negotiating power.

Threat Of New Entrants

The financial services industry has high barriers to entry, and new entrants face significant regulatory and capital requirements, limiting the threat of new entrants.

Intensity Of Rivalry

The financial services industry is highly competitive, with many established players, leading to a high intensity of rivalry among competitors.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 36.47%
Debt Cost 10.71%
Equity Weight 63.53%
Equity Cost 10.71%
WACC 10.71%
Leverage 57.40%

11. Quality Control: Citizens Financial Group, Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Popular

A-Score: 6.8/10

Value: 6.7

Growth: 5.9

Quality: 7.1

Yield: 5.0

Momentum: 8.0

Volatility: 8.3

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First Bank

A-Score: 6.8/10

Value: 7.1

Growth: 6.6

Quality: 8.2

Yield: 6.0

Momentum: 5.0

Volatility: 8.0

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First Hawaiian

A-Score: 6.3/10

Value: 6.3

Growth: 4.3

Quality: 6.8

Yield: 8.0

Momentum: 4.0

Volatility: 8.3

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Cathay Bank

A-Score: 6.3/10

Value: 6.0

Growth: 6.1

Quality: 7.4

Yield: 6.0

Momentum: 4.5

Volatility: 7.7

1-Year Total Return ->

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Citizens Financial Group

A-Score: 6.2/10

Value: 5.3

Growth: 5.2

Quality: 5.9

Yield: 7.0

Momentum: 7.0

Volatility: 7.0

1-Year Total Return ->

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Synovus

A-Score: 5.8/10

Value: 7.0

Growth: 5.4

Quality: 7.4

Yield: 6.0

Momentum: 3.5

Volatility: 5.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

62.62$

Current Price

62.62$

Potential

-0.00%

Expected Cash-Flows