Citizens Financial Group Inc (NYSE:CFG) stock fell 1.23% (As on January 18, 11:17:08 AM UTC-4, Source: Google Finance) after the company posted mixed result for the fourth quarter of FY 23. The net interest income (NII) declined by 2% quarter-over-quarter, attributed to a lower net interest margin (NIM), which fell from 3.03% to 2.91%. This was partly offset by a modest increase in interest-earning assets. Noninterest income saw a 2% increase quarter-over-quarter, with improvements in Capital Markets and Wealth, although this was partly offset by lower Mortgage Banking fees. The provision for credit losses was $171 million, with the allowance for credit losses to loans ratio increasing by 4 basis points quarter-over-quarter to 1.59%. The period-end loans decreased by 3%, and average loans decreased by 2% due to balance sheet optimization, including Non-Core portfolio run-off. Citizens Financial Group’s capital ratios remained strong, with a CET1 ratio of 10.6%, up from 10.4% in the previous quarter. The tangible book value per share increased by 11% quarter-over-quarter to $30.91, reflecting a solid balance sheet and prudent capital management. The company is seeing less pressure on deposit costs and NIM, fees are beginning to rebound, expenses remain well controlled, and credit costs are as expected. Key strategic initiatives like the Private Bank, NYC Metro, TOP 9 and Non-Core are all on track, positioning us well for medium-term growth and enhanced returns.

CFG in the fourth quarter of FY 23 has reported the adjusted earnings per share of 85 cents, beating the analysts’ estimates for the adjusted earnings per share of 60 cents. The company had reported the adjusted revenue growth of $1.99 billion in the fourth quarter of FY 23, missing the analysts’ estimates for revenue of $2.00 billion. On the expense side, noninterest expense was reported at $1.612 billion, stable quarter-over-quarter, including investments in the Private Bank start-up. The underlying efficiency ratio was 63.8%, or 61.9% excluding Private Bank start-up investment, indicating a slight increase in costs relative to revenue.

Additionally, the company has declared a quarterly common stock dividend of $0.42 per share, payable on February 14, 2024, to shareholders of record as of January 31, 2024. Notably, there were no share repurchases during the quarter due to the decision to pause to cover the impact of the industry-wide FDIC special assessment.