Citizens Financial Group (CFG) Q2 2023 Earnings Call Transcript

For the period ending June 30, 2023

July 19, 2023 9:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good morning, everyone. And welcome to the Citizens Financial Group Second Quarter 2023 Earnings Conference Call. My name is Alan, and I will be your operator today. Currently, all participants are in a listen-only mode. Following the presentation, we will conduct a brief question-and-answer session. As a reminder, this event is being recorded.

Now I will turn the call over to Kristin Silberberg, Executive Vice President, Investor Relations. Kristin, you may begin.

Kristin Silberberg

Thank you, Alan. Good morning, everyone, and thank you for joining us. First, this morning, our Chairman and CEO, Bruce Van Saun; and CFO, John Woods, will provide an overview of our second quarter results. Brendan Coughlin, Head of Consumer Banking; and Don McCree, Head of Commercial Banking, are also here to provide additional color. We will be referencing our second quarter earnings presentation located on our Investor Relations website. After the presentation, we will be happy to take questions.

Our comments today will include forward-looking statements, which are subject to risks and uncertainties that may cause our results to differ materially from expectations. These are outlined for your review on Page 2 of the presentation. We also reference non-GAAP financial measures, so it's important to review our GAAP results on Page 3 of the presentation and the reconciliations in the appendix.

And with that, I will hand over to you Bruce.

Bruce Van Saun

Thanks, Kristin, and good morning, everyone. Thanks for joining our call today.

The turbulent external environment continued in the second quarter, but we continue to navigate well and we delivered solid financial performance. In particular, we're pleased with the strong results we achieved around capital, liquidity and funding. Our CET1 ratio grew by 30 basis points to 10.3% in the quarter and we were able to repurchase in excess of $250 million in stock. We grew spot deposits by 3% or $5.5 billion and our spot loan-to-deposit ratio improved to 85%. Our federal home loan bank borrowings dropped by $7 billion to $5 billion and contingent liquidity grew by 20% to $79 billion.

For the quarter, we posted underlying earnings per share of $1.04 an ROTCE of 13.9%. NII was down 3% reflecting higher funding costs, in line with our expectations. Non-interest income grew 4%, slightly less than expected as capital markets saw a few deals pushed to the third quarter. The expenses were broadly stable as expected and credit cost continue to be manageable.