Citizens Financial Group Inc Q2 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Ryan Nash - Goldman Sachs & Co. LLC - Analyst : Hey. Good morning, everyone. Bruce, you saw a nice loan growth in the quarter. Obviously, a decent amount of it was idiosyncratic given the gains that you're making in the private bank. So I know there's a lot of moving pieces with loan growth, runoff and CRE, strategic runoff, but maybe can you just talk about what you're seeing in terms of growth in sort of the private bank and then everything else and how you're feeling about sentiments from borrowers for the remainder of the year? Thank you.

Question: Ryan Nash - Goldman Sachs & Co. LLC - Analyst : Yes. No, that was a great in-depth response. I just -- I feel bad that John didn't get a chance to answer, so maybe I'll just throw one out there for him. And obviously, it's been great to see the NIM expansion, and you sort of reiterated all the NIM expectations over the medium term. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 17, 2025 / 2:00PM, CFG.N - Q2 2025 Citizens Financial Group Inc Earnings Call I guess given the potential that we could have a more dovish Fed at some point in not so distant future, maybe just talk about what steps you are taking, if at all, to sort of try to lock in the higher end of those margin expectations? And even if we're in a more dovish environment, can we see sort of the midpoint or higher in terms of the net interest margin. Thank you. No more for me.

Question: Erika Najarian - UBS AG - Analyst : Yes. Hi. Good morning. Just wanted to ask about the right-hand side of the balance sheet in terms of the strategy for the second half of the year. Given everything that I've heard from Brendan and Don, it sounds like it's going to be a good second half for growth. And I've noticed, John, that you did have great NIB growth in the quarter. Total deposits were down a little bit. As we think about the second half of the year and potentially a growth year outlook, how are you thinking about sort of growth versus optimizing the mix? And/or is there sort of more BSO to consider that's coming on the asset side that could help fund that growth? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 17, 2025 / 2:00PM, CFG.N - Q2 2025 Citizens Financial Group Inc Earnings Call

Question: Erika Najarian - UBS AG - Analyst : Yeah. Just one more for you, Bruce. Just on the capital. Obviously, your large peers, the requirements have started to move down with this year's stress test, potentially more with other types of recalibration with Basel III Endgame potentially getting finalized; maybe the AOCI burden is just a

Question: Matt O'Connor - Deutsche Bank Securities Inc. - Analyst : Thank you. I was hoping you could just elaborate a little bit on the Reimagining the Bank initiative. Maybe any color if there's kind of a point person running it and how it's different from the top initiatives that we've seen over the last several years?

Question: Matt O'Connor - Deutsche Bank Securities Inc. - Analyst : All right. That's helpful. And then just as you think about kind of some of the upfront costs for this, are you thinking you can self-fund it like you've are they able to offer in the past, or anything that we should be mindful of in terms of notable items and things like that? Thanks.

Question: Ken Usdin - Autonomous Research - Analyst : Hey. Thanks. Good morning. Just two quick ones. So first, on the fee side, thanks for giving that color about the $30 million in the third quarter in capital markets, and we see the guide clearly. Just wondering if you could talk a little bit more just about that capital markets pipeline, what you're seeing underneath on the advisory side and other capital markets and how you're feeling about the outlook there. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 17, 2025 / 2:00PM, CFG.N - Q2 2025 Citizens Financial Group Inc Earnings Call

Question: Ken Usdin - Autonomous Research - Analyst : Okay. Great. And then just it's clear to see like the mortgage over earning in the quarter, so that's clear in the forward guide. Just the other was a bunch of smattering of items. Was there anything notably sizable in there? Or what a better run rate is for that other fees? Thanks, guys.

Question: John Pancari - Evercore Inc - Analyst : Morning. Just want to ask a little bit around competitive dynamics. You have a couple of peers out there citing some intensifying competition. We've heard both a bit on the loan pricing side as well as on deposits. And so I just want to see if you can give us a little bit more color what you're seeing there in terms of on the deposit side, your confidence in your data expectations? And are you seeing any of that pressure? And then on the loan pricing side, specifically as you see some acceleration in loan growth and your strategies there, are you seeing some intensifying competition from banks and non-banks?

Question: John Pancari - Evercore Inc - Analyst : Okay. Great. And then Bruce, just curious on your updated thoughts around the M&A backdrop. We've seen some -- a resumption of deals amid the regional banks. Just wanted to get your thoughts there. And I know you've kind of implied that over time, if you get -- you've got to work towards your results and then that will drive a multiple in your stock and everything. And just curious how you see citizens as being a potential player in the wave of consolidation that we could see.

Question: Manan Gosalia - Morgan Stanley & Co Ltd - Analyst : Hey. Good morning, all. Had a quick question on credit. Given that the office reserve was down about 50 basis points, can you update us on what you're seeing in the space? And I guess, if things are improving, how are you thinking about managing that reserve and the overall ACL over the next few quarters?

Question: Manan Gosalia - Morgan Stanley & Co Ltd - Analyst : That's very helpful. And then Bruce, I don't think I heard you talk about stablecoin when you spoke about reimagining the bank initiative. Is that an area of focus? And if that is, how are you thinking about the investments there? And in general, what impact do you think that will have on the bank -- ?

Question: Christopher McGratty - Keefe Bruyette & Woods Inc - Analyst : Great. Thanks for putting me in. Bruce, on capital allocation broadly, given the momentum you have in your capital markets business, is there a case to be made to be upping capital to these businesses? Anywhere you'd like to lean in a little bit more?

Question: Christopher McGratty - Keefe Bruyette & Woods Inc - Analyst : Okay. I appreciate that. And then the follow-up, the comments about charge-offs peaking likely in the first quarter in NPLs, last third, if I separate the office discussion, which you just handled, anything notable to call out in terms of inflows or inflow reversals over the last couple of quarters that give you confidence in those numbers? Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 17, 2025 / 2:00PM, CFG.N - Q2 2025 Citizens Financial Group Inc Earnings Call

Question: Scott Siefers - Piper Sandler & Co. - Analyst : Hey. Thanks, guys. I think most of my questions have been answered. I did want to ask, Bruce and Brendan, how does the private bank buildout look after we get past this year after you hit the $12 billion in deposits, $7 billion in loan, and $11 billion in assets under management target? Will we kind of be -- you've talked about the white space. So presumably, there's much more to do. But is there a point where we get to toward more of a critical mass where profitability kind of gets the flywheel upon itself or will we continue to add more teams at a similar pace to the last year or so?

Question: Ebrahim Poonawala - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Good morning. Appreciate the call has gone on too long. Just a couple of quick follow-ups. One, in terms of outlook for deposit costs, it feels like CDs still have some room to go. But then we saw the checking account rates move up quarter over quarter. So just wondering if we don't get any rate cuts, John, are deposit costs still trending lower through the second half of the year?

Question: Ebrahim Poonawala - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Got it. Just one quick one for you, Don. When we think about the lending outlook -- I'm not sure if you addressed this -- any sign -- any uptick on the sponsor-led side? Anything about capital call line lending? Are you seeing any pick-up there, and how much of that's kind of baked in for the back half? Thanks.