Gains from consumer lending and a wider margin outweighed a dip in fee income at Citizens Financial Group in Providence, R.I.

The $153.5 billion-asset company said it earned $388 million during the first quarter, or 21% more than a year earlier. Earnings per share were 78 cents, 2 cents higher than an estimate of analysts polled by FactSet Research Systems.

Chairman and CEO Bruce Van Saun said Friday in a press release praising the results that the company remains focused on making long-term investments, including in consumer-facing technology.

“We continue to make consistent progress in running the bank better, so we can do more for our stakeholders,” Van Saun said. “We are investing heavily in technology, our digital platform, customer experience and driving innovation, which collectively positions us well for future success.”

Citizens Bank branch.
Better at the margin
A 20-basis-point increase in the net interest margin also drove profits higher at the Providence, R.I., company. Bloomberg News


Net interest income climbed 9% to $1.1 billion. The net interest margin rose 20 basis points, to 3.16%. Total loans increased 3% to $112.2 billion, mostly from a 4% gain in lending to consumers, though a more gradual uptick in commercial lending (2%) was also a factor.

Total deposits rose 3%, to $115.7 billion.

Noninterest income dipped 2% to $371 million, thanks to a sharp decline in capital markets fees as well as lower revenue from customer service charges. Mortgage banking fees were $25 million in the first quarter, up nearly 9% from $23 million a year earlier, but down nearly 11% from $28 million in the fourth quarter.

Noninterest expenses increased 3% to $883 million on higher salaries and outside services. The company’s efficiency ratio, however, improved to 60% from 62%.

Lower taxes also provided a boost, as the company’s effective tax rate was 22.5%, compared with 26.4% a year earlier.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.
Kristin Broughton

Kristin Broughton

Kristin Broughton is a reporter for American Banker, where she writes about the business of national and regional banking.