Citizens Financial Group (CFG) Q4 2024 earnings summary

Executive summary

• Delivered strong Q4 and full-year 2024 results, with sequential revenue growth, NIM expansion, and positive operating leverage; Q4 underlying EPS was $0.85, ROTCE 10.7%, and PPNR up 4% sequentially.

• Private Bank achieved its first profitable quarter, reaching $7B in deposits and $3.1B in loans, and contributed $0.01 to Q4 EPS.

• Strategic initiatives advanced in Private Bank, NYC Metro, private capital, and payments businesses, with TOP 9 completed and TOP 10 targeting $100M pre-tax run-rate benefit by YE2025.

• Favorable credit trends, robust capital and liquidity, and continued share repurchases supported performance.

• Board declared a quarterly dividend of $0.42 per share, payable February 14, 2025.

Financial highlights

• Underlying EPS for 2024 was $3.24, including a $0.45 drag from non-core and $0.05 investment in Private Bank; full-year ROTCE was 10.5%.

• Q4 net interest income rose 3% sequentially to $1.41B, with NIM up 10 bps to 2.87%; noninterest income was $574M, up 8% QoQ and 15% YoY.

• Q4 underlying net income was $412M, EPS $0.85, ROTCE 10.7%; FY2024 underlying net income was $1.47B, EPS $3.24.

• Fees up 9% YoY, led by capital markets, card, and wealth; expenses up 1.5% YoY; underlying noninterest expense rose 4% QoQ and 2% YoY.

• Tangible book value per share was $32.34, down 3.6% QoQ due to AOCI impact.

Outlook and guidance

• 2025 NII expected to rise 3%-5%, driven by NIM expansion to ~3%; noninterest income projected to grow 8%-10%, led by capital markets and wealth.

• Expenses to increase ~4% in 2025, with positive operating leverage of 150 basis points; Private Bank to contribute 5%+ to earnings.

• Net charge-offs expected to trend down to $650M-$700M; CET1 ratio to end 2025 at 10.5%-10.75%.

• Medium-term ROTCE target of 16%-18% by 2027, with NIM projected at 3.25%-3.5%.

• Management expressed confidence in positioning for a strong 2025, citing execution of key initiatives and balance sheet strength.