Citizens Financial shares rise after loan growth, rate hikes and higher dividends (NYSE:CFG)



Citizens Financial Group (NYSE: CFG) the stock is up 3.5% Tuesday before market after the bank delivered better-than-expected Q2 earnings, helped by higher interest rates. It also announced a 7.7% increase in its quarterly dividend.

Underlying EPS of $1.14 in Q2exceeding the consensus estimate of $1.02, fell from $1.07 in the first quarter of 2022 to $1.46 in the second quarter of 2021.

Q2 net interest income of $1.51 billion increased from $1.15 billion in the prior quarter and $1.12 billion in the prior year quarter. The net interest margin of 3.04% decreased from 2.75% in the first quarter and from 2.71% in the second quarter of 2021.

Non-interest expense of $1.31 billion increased from $1.11 billion in the prior quarter and $991 million in the prior year quarter.

Provision for credit losses of $216m increased from $3m in Q1 2022 and was reversed from a benefit of $213m in Q2 2021.

Average loans and leases in the second quarter reached $153.8 billion, including $21.8 billion from HSBC/ISBC, compared to $129.2 billion in the previous quarter.

Q2 average deposits of $176.4 billion were up from $155.1 billion in the prior quarter.

Tips: The company expects Q3 net interest income to rise 5.5% to 7% from Q2’s 1.51b and noninterest income in the quarter to be “broadly stable if market volatility decreases”. It also expects strong sequential positive operating leverage in the third quarter and a return on tangible equity above its mid-term target range of 14% to 16%.

For the full year, Citizens (CFG) is reiterating its forecast for net income before provisioning compared to its April forecast.

Conference call at 9:00 a.m. ET.

Recall that last month, Citizens (CFG) announced its intention to increase its share buyback program to $1.0 billion after the Federal Reserve’s stress tests.

Earlier Citizens Financial (CFG) non-GAAP EPS $1.14 beats $0.12, $1.99 billion in revenue online


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