Citizens Financial Group in Providence, R.I., reported bigger profits in the fourth quarter on the strength of loan growth and improvements in its loan yield.
The bank, which was spun off from Royal Bank of Scotland in 2014, recorded net income of $282 million, a 22% increase from the same period a year earlier.
The company's earnings per share were 55 cents, which beat the 52-cent average estimate from analysts.
Revenue rose by 11% to $1.4 billion, thanks largely to 8% average loan growth and a 13-basis-point improvement in the firm's net interest margin to 2.90%.
Average deposits were also up by 8% to $109 billion.
"We are pleased to report another strong quarter with improving results, as we continue to run the bank better and deliver well for all stakeholders," CEO Bruce Van Saun said in a press release. "We enter 2017 with good momentum and believe we are well positioned to capitalize on an improving economic and interest rate environment."
Citizens recorded a 5% increase in non-interest expenses to $847 million, which the firm said was tied to higher salaries and employee benefits, among other factors. The company, which has been expanding its sales force, said that it added 85 sales-related positions during the fourth quarter.
But higher expenses were not enough to offset revenue gains. Citizens' efficiency ratio – a measure of expenses as a percentage of revenue -- was 62% during the fourth quarter. That was down from 66% during the fourth quarter of 2015.
Citizens recorded a 12% increase in its provision for credit losses, which rose to $102 million. The company said higher charge-offs in its commercial lending business were a factor in the rise.