CFG-PE — Citizens Financial Group, Inc.

Summary of CFG-PE Q4 2025 Earnings Call

1. Key Financial Results and Metrics:

• Earnings Per Share (EPS): Q4 EPS was $1.13, up 8% sequentially and 36% year-over-year. Full-year EPS was $3.86, a 19% increase from 2024.
• Net Interest Income (NII): Increased 9% year-over-year, with a net interest margin (NIM) expansion of 20 basis points to 3.07%.
• Fees: Up 8% year-over-year, driven by strong capital markets and wealth management performance.
• Operating Leverage: Positive operating leverage of 1.3% sequentially and 5.2% year-over-year.
• Return on Equity (ROE): 12.2% for Q4; private bank contributed $0.10 to EPS in Q4.
• Share Repurchases: 3% of shares retired in 2025, with $326 million returned to shareholders in Q4 alone.

2. Strategic Updates and Business Highlights:

• Private Bank Growth: Deposits reached $4.145 billion, with $10 billion in client assets and $7.2 billion in loans. The private bank exceeded its income contribution target, achieving a 25% ROE.
• Non-Core Asset Reduction: Successfully reduced non-core assets from $6.9 billion to $2.5 billion.
• Reimagine the Bank Initiative: Launched to enhance customer experience and drive efficiency, with approximately 50 initiatives planned.
• Wealth Management Performance: Continued strong growth in wealth management, with record results in both private banking and branch-based services.

3. Forward Guidance and Outlook:

• 2026 Expectations: Projecting NII growth of 10% to 12%, with continued NIM expansion. Loan growth expected to be 3% to 5%, and non-interest income growth of 6% to 8%.
• Expense Management: Anticipated expense growth of 4.5%, with a focus on maintaining investments in growth initiatives.
• Credit Outlook: Continued improvement in credit costs, with net charge-offs projected in the mid to high 30s basis points.
• Capital Return: Plans for share repurchases of $700 million to $850 million in 2026.

4. Bad News, Challenges, or Points of Concern:

• Expense Growth: Expenses were up 4.6% versus a guidance of 4%, primarily due to incentive compensation linked to fee performance.
• Market Uncertainty: Potential headwinds from macroeconomic factors, including regulatory changes and competitive pressures in the banking sector.
• Loan Growth Risks: While loan growth is expected, there are concerns regarding the pace of recovery in commercial real estate and overall economic conditions.

5. Notable Q&A Insights:

• Reimagine the Bank: Executives discussed the initiative's potential to enhance ROTCE and improve customer experience, though specifics on how benefits will flow through to the bottom line remain uncertain.
• Loan Growth Dynamics: The bank is optimistic about loan growth driven by private banking and commercial banking, but acknowledged the need to balance this with ongoing reductions in non-core assets.
• Deposit Growth: Executives expressed confidence in maintaining deposit growth, particularly in non-interest-bearing accounts, despite competitive pressures.
• AI Investments: The bank is focusing on AI capabilities to enhance operational efficiency, particularly in customer service and fraud detection.

Overall, CFG-PE reported strong financial results for Q4 2025, with a positive outlook for 2026 driven by strategic initiatives and growth in key business areas. However, challenges related to expense management and market conditions remain pertinent.