Citizens Financial Group Powers Through Q1 2025 with Strong Earnings and Strategic Progress
Despite a rise in macroeconomic uncertainty, Citizens Financial Group has delivered strong first-quarter earnings and made significant progress on its strategic initiatives. In a conference call on April 16, 2025, the company's leadership presented a robust set of financial results that met expectations.
The key highlights from Q1 include a net interest margin (NIM) expansion of 3 basis points to 290, core loan growth of 1%, and resilience in fee categories despite softness in capital markets. The company's balance sheet remains strong, with a common equity tier 1 (CET1) ratio of 10.6% and a low leverage ratio (LVR) of 77.5%. This solid foundation has enabled Citizens to execute on its strategic initiatives, including the Private Bank, which saw excellent growth in deposits and assets under management (AUM).
The company's CEO, Bruce Van Saun, highlighted the importance of these initiatives, stating that they "have clearly been an increase in uncertainty in the macro environment given the policy decisions and rollout emanating from Washington." However, he noted that corporate and consumer borrowers are in good shape and positioned to weather these challenges. This confidence is reflected in the company's full-year guide, which remains unchanged despite the current uncertainty.
A key announcement during Q1 was the sale of $1.9 billion in purchased student loans, which will be settled ratably over three quarters. The proceeds from this transaction will be used to pay down high-cost funding, purchase low-risk-weighted securities, and repurchase shares. This move is expected to be accretive to NIM, earnings per share (EPS), and return on tangible common equity (ROTCE).
The company also issued $750 million in senior debt during the quarter, further bolstering its funding base. As the CEO emphasized, "We have a strong balance sheet, which gives us the flexibility to navigate through these uncertain times."
Looking forward, Citizens remains focused on pulling the levers it can control to offset any macro headwinds. The company is working on a record number and dollar value of mergers and acquisitions (M&A) transactions and is hopeful that they will get done as uncertainty subsides.
In short, Citizens Financial Group has demonstrated its ability to power through challenging times with strong earnings and strategic progress. As the company looks to the medium term, it remains confident in its NIM trajectory and ability to execute on key initiatives like the Private Bank."
