Citizens Financial Group, Inc. Announces Preliminary Stress Capital Buffer and $656 million Increase in Share Repurchase Authorization to $1.25 billion
June 28 2024 - 4:37PM
Business Wire
Citizens Financial Group, Inc. (NYSE: CFG or the “Company”)
today announces the Board of Governors of the Federal Reserve
System (the “Federal Reserve”) has communicated to the Company its
preliminary Stress Capital Buffer (“SCB”) of 4.5%, effective
October 1, 2024, following the release of the Federal Reserve’s
DFAST stress test results on June 26, 2024.
The Company’s regulatory minimum CET1 ratio implied by the
preliminary SCB is 9.0%. Citizens expects its second quarter 2024
CET1 ratio to be approximately 160 basis points above the implied
regulatory minimum, reaffirming the capital strength of the
Company. This strong capital position permits continued support of
customer needs and organic growth initiatives as well as strong
ongoing return of capital to shareholders.
The Company also today announced that its board of directors has
increased the capacity of the Company’s common share repurchase
program to $1.25 billion, an increase of $656 million above the
$594 million of capacity remaining as of June 28, 2024 under the
prior February 2023 authorization.
“The Federal Reserve’s stress test results illustrate Citizens’
strong capital position, which is well in excess of our regulatory
minimum,” said John F. Woods, Vice Chair and Chief Financial
Officer. “We note that the Federal Reserve’s stress test results
reflect an improvement in their modeled credit losses overall,
driven by a reduction in commercial real estate losses, compared
with the 2023 stress test. However, the Federal Reserve’s modeled
decline in pre-provision net revenue (“PPNR”) generation is
inconsistent with our company-run stress test, which reflects
meaningfully better PPNR results.”
Woods added, “We are pleased to report that our Board has
approved an increase to our share repurchase authorization. The
authorization reflects confidence in our ability to deliver strong
financial performance while continuing to invest across our
businesses and deliver attractive returns to shareholders. We will
continue to operate within our targeted CET1 range of 10.0 to
10.5%.”
The Company will assess potential changes to its capital
distributions as conditions warrant. Citizens’ common stock
repurchases may be executed in the open market or in privately
negotiated transactions, including under Rule 10b5-1 plans and
accelerated share repurchase and other structured transactions.
Common stock dividends are subject to consideration and approval by
Citizens’ Board of Directors. The timing and exact amount of common
share repurchases and common stock dividends will be subject to
various factors, including the company’s capital position,
financial performance, capital impacts of strategic initiatives,
market conditions and other regulatory considerations.
About Citizens Financial Group,
Inc.
Citizens Financial Group, Inc. is one of the nation’s oldest and
largest financial institutions, with $220.4 billion in assets as of
March 31, 2024. Headquartered in Providence, Rhode Island, Citizens
offers a broad range of retail and commercial banking products and
services to individuals, small businesses, middle-market companies,
large corporations and institutions. Citizens helps its customers
reach their potential by listening to them and by understanding
their needs in order to offer tailored advice, ideas and solutions.
In Consumer Banking, Citizens provides an integrated experience
that includes mobile and online banking, a full-service customer
contact center and the convenience of approximately 3,300 ATMs and
more than 1,000 branches in 14 states and the District of Columbia.
Consumer Banking products and services include a full range of
banking, lending, savings, wealth management and small business
offerings. In Commercial Banking, Citizens offers a broad
complement of financial products and solutions, including lending
and leasing, deposit and treasury management services, foreign
exchange, interest rate and commodity risk management solutions, as
well as loan syndication, corporate finance, merger and
acquisition, and debt and equity capital markets capabilities. More
information is available at www.citizensbank.com or visit us on X,
LinkedIn or Facebook.
Forward-Looking
Statements
This document contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Any statement that does not describe historical or current facts is
a forward-looking statement. These statements often include the
words “believes,” “expects,” “anticipates,” “estimates,” “intends,”
“plans,” “goals,” “targets,” “initiatives,” “potentially,”
“probably,” “projects,” “prospects,” “outlook,” “guidance” or
similar expressions or future conditional verbs such as “may,”
“will,” “should,” “would,” and “could.”
Forward-looking statements are based upon the current beliefs
and expectations of management, and on information currently
available to management. Our statements speak as of the date
hereof, and we do not assume any obligation to update these
statements or to update the reasons why actual results could differ
from those contained in such statements in light of new information
or future events. We caution you, therefore, against relying on any
of these forward-looking statements. They are neither statements of
historical fact nor guarantees or assurances of future performance.
While there is no assurance that any list of risks and
uncertainties or risk factors is complete, important factors that
could cause actual results to differ materially from those in the
forward-looking statements include the following, without
limitation:
- Negative economic, business and political conditions, including
as a result of the interest rate environment, supply chain
disruptions, inflationary pressures and labor shortages, that
adversely affect the general economy, housing prices, the job
market, consumer confidence and spending habits;
- The general state of the economy and employment, as well as
general business and economic conditions, and changes in the
competitive environment;
- Our capital and liquidity requirements under regulatory
standards and our ability to generate capital and liquidity on
favorable terms;
- The effect of changes in our credit ratings on our cost of
funding, access to capital markets, ability to market our
securities, and overall liquidity position;
- The effect of changes in the level of commercial and consumer
deposits on our funding costs and net interest margin;
- Our ability to implement our business strategy and achieve our
financial performance goals across our Consumer, Commercial and
Private Bank businesses;
- The effects of geopolitical instability, including the wars in
Ukraine and the Middle East, on economic and market conditions,
inflationary pressures and the interest rate environment, commodity
price and foreign exchange rate volatility, and heightened
cybersecurity risks;
- Our ability to comply with heightened supervisory requirements
and expectations;
- Liabilities and business restrictions resulting from litigation
and regulatory investigations;
- The effect of changes in interest rates on our net interest
income, net interest margin and our mortgage originations, mortgage
servicing rights and mortgages held for sale;
- Changes in interest rates and market liquidity, as well as the
magnitude of such changes, which may reduce interest margins,
impact funding sources and affect the ability to originate and
distribute financial products in the primary and secondary
markets;
- Financial services reform and other current, pending or future
legislation or regulation that could have a negative effect on our
revenue and businesses;
- Environmental risks, such as physical or transition risks
associated with climate change, and social and governance risks,
that could adversely affect our reputation, operations, business,
and customers;
- A failure in or breach of our compliance with laws, as well as
operational or security systems or infrastructure, or those of our
third-party vendors or other service providers, including as a
result of cyber-attacks; and
- Management’s ability to identify and manage these and other
risks.
In addition to the above factors, we also caution that the
actual amounts and timing of any future common stock dividends or
share repurchases will be subject to various factors, including our
capital position, financial performance, capital impacts of
strategic initiatives, market conditions, and regulatory
considerations, as well as any other factors that our Board of
Directors deems relevant in making such a determination. Therefore,
there can be no assurance that we will repurchase shares from or
pay any dividends to holders of our common stock, or as to the
amount of any such repurchases or dividends.
More information about factors that could cause actual results
to differ materially from those described in the forward-looking
statements can be found in the “Risk Factors” section in Part I,
Item 1A of our Annual Report on Form 10-K for the fiscal year ended
December 31, 2023 as filed with the Securities and Exchange
Commission.
CFG-IR
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