Citizens Financial Group Boosts Capital Strength

By Bobby Samwell • Friday, June 28 16:57 • Permanent Link

Citizens Financial Group, Inc. (NYSE: CFG) has announced its preliminary stress capital buffer (SCB) of 4.5%, effective October 1, 2024, following the release of the Federal Reserve's Dodd-Frank Act Stress Test (DFAST) results on June 26, 2024. The regulatory minimum Common Equity Tier 1 (CET1) ratio implied by the preliminary SCB is now 9.0%.

The company's second quarter 2024 CET1 ratio is expected to be approximately 160 basis points above the implied regulatory minimum, demonstrating the company's capital strength. This strong capital position allows Citizens Financial Group to continue supporting customer needs and organic growth initiatives, as well as facilitating a strong ongoing return of capital to shareholders.

In light of the company's robust capital position, its board of directors has increased the capacity of the common share repurchase program to $1.25 billion. This represents a substantial increase of $656 million above the $594 million of capacity remaining as of June 28, 2024, under the prior February 2023 authorization.

John F. Woods, Vice Chair and Chief Financial Officer, commented on the Federal Reserve's stress test results, noting an improvement in modeled credit losses and a reduction in commercial real estate losses compared with the 2023 stress test. However, he highlighted an inconsistency with the Federal Reserve's modeled decline in pre-provision net revenue (PPNR) generation, as Citizens Financial Group's company-run stress test reflects significantly better PPNR results.

The company intends to operate within its targeted CET1 range of 10.0 to 10.5% and will assess potential changes to its capital distributions as conditions warrant. Share repurchases may be executed in the open market or in privately negotiated transactions, subject to various factors such as the company's capital position, financial performance, and market conditions.

Citizens Financial Group, Inc. reported $220.4 billion in assets as of March 31, 2024. The company offers a broad range of retail and commercial banking products and services, with approximately 3,300 ATMs and 1,000 branches in 14 states and the District of Columbia.

Today the company's shares have moved 4.0% to a price of $36.03. If you want to know more, read the company's complete 8-K report here.

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