By Angela Chen
Citizens Financial Group Inc. reported a 30% increase in
fourth-quarter profit as strength in retail and commercial loans
pushed up net interest income for the regional lender, which went
public late last year.
The results beat expectations.
The Providence, R.I., firm said it earned $197 million in the
December quarter, up from $152 million a year earlier. On a
per-share basis, the bank's earnings increased to 36 cents from 27
cents a year earlier.
Excluding special items, per-share earnings rose to 39 cents,
from 30 cents a share a year earlier.
Revenue edged up slightly to $1.18 billion from $1.16
billion.
Analysts polled by Thomson Reuters had expected earnings of 34
cents on revenue of $1.17 billion.
For the most recently ended quarter, net interest income edged
up 2.4% to $840 million from a year earlier. This was driven by
average loans and leases that increased $2.4 billion, or 3%, on
strength in both retail and commercial loans.
Like other regional banks, Citizens has faced stubbornly low
interest rates that have dented interest income. Citizens said its
net interest margin, a key margin of lending profitability,
increased to 2.8% from 2.77% the quarter before, though it was down
from 2.83% a year earlier.
Noninterest income fell 11% to $339 million, a result of a
reduction in securities gains and a decline in service charges and
fees and card fees, the bank said.
Capital markets were a bright spot. Fees for that business grew
to $25 million from $18 million a year earlier.
Citizens went public on Sept. 24 and its stock rose 7.4% on its
first day of trading after it was priced below expectations the day
before. The lender's parent, Royal Bank of Scotland Group PLC, has
reduced its stake in the firm by a quarter and has said it would
exit its holdings completely by the end of 2016.
The bank by the end of 2016 plans to increase the number of
mortgage-loan officers to 700, up from 350 at the beginning of
2014. In addition, the bank plans to add between 60 and 75
financial consultants in its wealth-management business to its pool
of 300.
Shares of Citizens, which were inactive premarket, have risen
about 3% in the past three months through Friday's close.
Write to Angela Chen at angela.chen@dowjones.com
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