Citizens Financial Group, Inc. reported a net income of $373 million for the first quarter of 2025, reflecting an increase of $39 million compared to the same period in 2024. Earnings per diluted share rose to $0.77, up from $0.65 a year earlier. However, total revenue decreased by $24 million to $1.9 billion, primarily due to a 4% decline in net interest income, which was attributed to a decrease in average interest-earning assets. The efficiency ratio improved to 67.91% from 69.33% in the prior year, while the return on average tangible common equity (ROTCE) increased to 9.64% from 8.86%.
In a strategic move, Citizens Financial Group entered into an agreement to sell $1.9 billion of non-core education loans, which were subsequently reclassified to loans held for sale (LHFS). This transaction resulted in a $25 million charge-off, covered by existing reserves, and is expected to enhance net interest margin and earnings per share as it settles throughout 2025. Additionally, the company issued $750 million in fixed/floating-rate senior notes on March 5, 2025, maturing in 2031, to bolster its capital structure.
Operationally, Citizens Financial Group reported a decrease in total loans and leases to $137.6 billion as of March 31, 2025, down from $139.2 billion at the end of 2024. This decline was driven by the aforementioned sale of education loans and a reduction in the non-core portfolio. The company also experienced a decrease in average deposits, which fell by $3.4 billion year-over-year, although consumer deposits increased due to growth in the Private Bank segment. The total employee headcount remained stable, reflecting ongoing investments in the Private Bank and broader consumer banking initiatives.
Looking ahead, Citizens Financial Group anticipates continued challenges from economic conditions, including inflationary pressures and geopolitical tensions, which may impact credit quality and overall financial performance. The company maintains a cautious outlook, projecting a mild recession with peak unemployment around 5.1% and a slight decline in real GDP. The management emphasized its commitment to monitoring regulatory developments, particularly regarding climate-related disclosures and the Community Reinvestment Act, which could influence future operational strategies and compliance requirements.
About CITIZENS FINANCIAL GROUP INC/RI
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