Citizens Financial Group (CFG) RBC Capital Markets Financial Institutions Conference summary

Macroeconomic and industry environment

• Uncertainty persists due to competing narratives: pro-business expectations versus near-term concerns over rates and tariffs.

• Management teams are cautiously optimistic, expecting a rebound and strong activity in the second half of the year.

• Commercial customers show resilience, having strengthened balance sheets and preserved margins post-pandemic.

• Consumer segment remains stable, with most customers being high-prime homeowners insulated from rate shocks.

• Lower 10-year yields are seen as net positive, but a sustained decline and increased housing supply are needed for a refinancing surge.

Capital markets and business strategy

• Capital markets business has expanded through organic growth and acquisitions, now offering a broad product suite.

• The firm ranks among the top in middle market M&A and sponsor-driven transactions, leveraging industry verticals and private capital relationships.

• Private capital partnerships are frequent but exclusivity is avoided to maintain flexibility and broad market access.

• M&A activity is expected to accelerate in the second half of the year as uncertainty diminishes and pipelines remain robust.

• Strategic focus includes further integration of recent acquisitions, geographic expansion, and industry vertical specialization.

Financial targets and outlook

• Clear path to 16%-18% ROTCE, driven by time-based balance sheet turnover and strategic initiatives.

• Organic growth is prioritized, with bolt-on M&A considered only for capability enhancement, especially in fee-based areas.

• Medium-term net interest margin target of 3.25%-3.5% is supported by mechanical tailwinds and is sensitive to Fed policy.

• 2025 is projected to deliver strong operating leverage, with net interest income and fee growth.

• Near-term performance aligns with expectations: loan growth in C&I and Private Bank, stable deposits, and improving credit trends.