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 increase 5.5% to 7% from 1.51b in Q2 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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