PROVIDENCE – Citizens Financial Group Inc.’s RBS Citizens NA, the holding company for most Citizens and Charter One banks, lost more than $1 billion last year, it said in a recent filing with the Federal Deposit Insurance Corporation.
RBS Citizens’ annual Uniform Bank Performance Report showed a net loss of more than $1.10 billion for the year ended Dec. 31 – compared with 2007 net income of more than $1.13 billion – on operating income it said rose 2.94 percent to $4.84 billion.
Meanwhile, net interest income rose 3.26 percent to nearly $3.39 billion, as the segment’s interest income fell 9.90 percent to $6.27 billion but interest expense fell 21.64 percent to $2.88 billion. Non-interest income also rose , edging up 2.21 percent compared with 2007 to $1.45 billion.
Total assets grew to $129.49 billion on Dec. 31, from $128.86 billion a year earlier. Total deposits shrank, however, to $73.81 billion from the year-ago $77.53 billion.
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But the segment would have shown a profit last year if not for a one-time goodwill impairment charge of $1.60 billion, the FDIC filing shows. The 2008 results for RBS Citizens also included a $1.69 billion set-aside against anticipated loan losses, up from the segment’s loan-loss provision of $618.72 million the year before.
Parent Citizens Financial – which besides RBS Citizens includes the Citizens Bank of Pennsylvania – would have shown an operating profit of about $465 million last year, down from $1.5 billion in 2007, if the RBS Citizens goodwill charge were excluded, Boston Business Journal reported today.
Citizens Financial is a division of the Edinburgh-based Royal Bank of Scotland Group plc. (London Stock Exchange: RBS.L; NYSE: RBS), which is slated to report its annual results tomorrow.
Seven days ago, Royal Bank unveiled a “pay and rewards settlement” negotiated with the British government, which is now a majority stakeholder, that included a 90 percent reduction in cash performance bonuses. (READ MORE) The company last month said it anticipated its 2008 loss would reach a record 28 billion pounds (nearly $40 billion). “When we think about them geographically, the U.S. is the biggest area of losses; Europe also significant, and the U.K. smaller; again in the wholesale, much more in the wholesale area,” CEO Stephen Hester told analysts and investors during a Jan. 19 conference call.
Analysts blame the buying spree overseen by former Royal Bank CEO Sir Fred Goodwin – who was ousted by the British government in October when the bank agreed to participate in its bank bailout scheme (READ MORE) – especially the 2007 purchase of Netherlands-based ABN Amro and the 2004 purchase of the Charter One banks that accounted for much of last year’s goodwill charge at Providence-based RBS Citizens.
“We know the days ahead are not going to be easy for any of us,” Ellen Alemany, the CEO of Providence-based Citizens Financial Group and its parent RBS Americas, told local business leaders this fall during the Greater Providence Chamber of Commerce’s annual dinner at the R.I. Convention Center. (READ MORE) But, she added, Citizens’ connection to RBS gives the U.S. bank “a position of strength and influence at a very big table, which is important to all of us in the room.”
Citizens Financial Group Inc. is a commercial bank holding company founded in Providence in 1828. It has $161 billion in assets and about 24,300 employees at 1,618 Citizens Bank and Charter One branches in 13 states plus non-branch offices in about 40 states, most of which Citizens Financial operates through its RBS Citizens NA subsidiary. Additional information is available at CitizensBank.com or www.rbs.com.
