Citizens shows gains in 2015 on operations

CITIZENS FINANCIAL GROUP posted adjusted net income for 2015 of $871 million, a more than 10 percent increase from its 2014 results, once one-time adjustments and restructuring charges were removed from the filing. This was the first full-year financial statement of a fully independent Citizens, which has broken free of the Royal Bank of Scotland.
CITIZENS FINANCIAL GROUP posted adjusted net income for 2015 of $871 million, a more than 10 percent increase from its 2014 results, once one-time adjustments and restructuring charges were removed from the filing. This was the first full-year financial statement of a fully independent Citizens, which has broken free of the Royal Bank of Scotland.

(Updated, 6:14 p.m.)
PROVIDENCE – In its first full-year earnings report as an independent bank, Citizens Financial Group Inc. showed continuing improvement in its operations. Removing the effects over the last two years of restructuring charges and the bank’s sale of its Charter One retail branches in the Chicago area, Citizens profit increased 10.3 percent to $871 million. Adjusted diluted earnings per share were $1.61 in 2015 versus $1.42 in 2014.
The sale of the Charter One operations had added an after-tax gain to 2014 results of $180 million, while year-ago restructuring charges subtracted $105 million after taxes. In 2015, restructuring charges hurt the bottom line by $31 million.

Following generally accepted accounting principles, Citizens’ 2015 results showed a 2.9 percent decline in net income to $840 million, or $1.55 per diluted share. Net income for the quarter ended Dec. 31, however, grew 12.2 percent to $221 million compared with $197 million in the same period in 2014, according to the company’s fourth-quarter and year-end earnings report released Friday. The company’s board of directors announced a cash dividend of 10 cents per common share.

Revenue grew during the quarter, but fell for the year. Indeed, total interest and noninterest income grew 5.3 percent to $1.3 billion during the fourth quarter, but fell 1.2 percent to $5.3 billion overall in 2015.

The results, however, were largely in line with the bank’s expectations mapped out in January 2015, according to Chairman and CEO Bruce Van Saun, who spoke during a conference call Friday morning.

- Advertisement -

“We made great progress and had a strong overall year in 2015,” Saun said. “We delivered solid execution on our plan to improve Citizens’ performance for all stakeholders. This resulted in improving financial performance that permitted RBS to fully divest their ownership position.”

London-based RBS, former parent of Citizens, fully divested from Citizens last year, after beginning the spin-off process a year earlier. RBS has been under pressure from the British government to pay back the estimated 45.5 billion pound bail out from the financial crisis.

Total assets grew 4 percent to $138.2 billion compared with $132.9 billion a year earlier. The increase was fueled largely by strong growth of loans and leases, and loans held for sale growth. Loans and leases, and loans held for sale totaled $99.4 billion, growing 6.1 percent compared with the same period in 2014.

Even with the growth, the percentage of nonperforming loans and leases fell to 1.07 percent of the total, compared with 1.18 percent in 2014. Allowance for loan and lease losses as a percentage of the total fell as well, to 1.23 percent compared with 1.28 percent a year earlier.

Deposits grew 7.1 percent over the year to $102.5 billion at the end of 2015.

Return on average common equity grew to 4.5 percent in the fourth quarter compared with 4.1 percent in the same period in 2014, while return on average total assets remained at 0.6 percent for the year. The net interest margin for 2015 was 2.75 percent, a decline from 2.83 percent in 2014.

Consumer banking net income grew 28.8 percent to $67 million in the fourth quarter compared with the same period last year, as commercial banking net income grew 8.6 percent to $152 million during the same period.

Van Saun says 2016 will be about improving the overall financial and operational strength of the bank, while serving its customers well, which he expects will happen despite the early turmoil this year in equity markets. The Federal Reserve’s December 0.25 percent increase to short-term interest rates has had a marginal effect on the company’s finances thus far, but Van Saun expects there could be as many as two more rate hikes in 2016, which could help strengthen the company’s finances this year and possibly the next.

“As we enter 2016, we remain very focused on execution – we want to continue to grow our balance sheet, serve our customers well and operate efficiently to deliver positive operating leverage,” he said.

No posts to display