Citizens reports record-breaking $320M profit

CITIZENS FINANCIAL GROUP is led by Chairman and CEO Bruce Van Saun. / PBN FILE PHOTO/MICHAEL SALERNO
CITIZENS FINANCIAL GROUP is led by Chairman and CEO Bruce Van Saun. / PBN FILE PHOTO/MICHAEL SALERNO

PROVIDENCE – Buoyed by strong fee-based business, Citizens Financial Group Inc. on Thursday reported record-breaking, first-quarter profit of $320 million, or 61 cents per diluted share, an increase of 43.5 percent on the 2016 first-quarter results, when net income was $223 million, or 41 cents per diluted share. Total interest and noninterest income grew 14.1 percent to $1.5 billion compared with a year earlier.

“We are firing on all cylinders, with strong loan and deposit growth, solid net interest margin expansion, excellent results on our fee-based business, particularly in capital markets, global markets and wealth management, and good control of expenses and credit costs,” said Bruce Van Saun, chairman and CEO, in a statement.

The Providence-based bank received a boost from several lines of business, including capital market fees, which grew 92 percent to $48 million. Card fees also grew 20 percent to $60 million. Overall, the bank realized robust growth in fee-based business, as noninterest income grew 14.8 percent to $379 million.

At the same time, noninterest expense grew 5.3 percent to $854 million, which the bank attributed largely to seasonal increases in salaries and employee benefits.

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Total loans and leases and loans held for sale grew 6.9 percent to $108.8 billion compared with $101.7 billion a year earlier. The bank realized growth in both commercial and retail lending, which increased 8.2 percent and 6 percent, respectively.

Total nonperforming loans and leases as a percentage of total loans and leases decreased to 0.97 percent from 1.07 percent a year earlier. Allowance for loan and lease losses as a percentage of loans and leases fell to 1.13 percent compared with 1.21 percent in the first three months of 2016.

The bank’s net interest margin grew to 2.96 percent compared with 2.86 percent a year earlier. The bank reported a $23 million benefit during the quarter, or 4 cents per diluted share, related to state tax settlement.

Total deposits grew 9.3 percent to $112.1 billion. Total assets grew 7.3 percent to $150.3 billion. The bank also reported increases in the return on common equity – to 6.5 percent from 4.5 percent – and the return on average total assets – to 0.87 percent from 0.65 percent.

Bank executives briefly addressed a recent Wall Street Journal report about current and former employees overstating how many times they scheduled or conducted customer meetings. The bank pointed out to investors that there was no suggestion of customer harm in the story, and that there hadn’t been any evidence of any since.

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