Citizens Financial : 3Q19 Pillar 3 Regulatory Disclosures

Pillar 3 Regulatory Disclosures

For the quarterly period ended September 30, 2019

CITIZENS FINANCIAL GROUP, INC.
September 30, 2019 Pillar 3 Regulatory Disclosures
TABLE OF CONTENTS
Glossary of Acronyms and Terms..............................................................................................	2
Introduction......................................................................................................................	4
Report Overview..............................................................................................................	4
Scope of Application.........................................................................................................	4
Risk Governance.................................................................................................................	5
Capital Structure and Adequacy...............................................................................................	6
Capital Structure.............................................................................................................	6
Capital Adequacy Process...................................................................................................	7
Capital Conservation Buffer................................................................................................	9
Credit Risk........................................................................................................................	10
Credit Risk Exposure.........................................................................................................	10
Counterparty Credit Risk-Related Disclosures...........................................................................	14
Credit Risk Mitigation.......................................................................................................	15
Securitization....................................................................................................................	15
Equities (Non-Trading)..........................................................................................................	17
Market Risk.......................................................................................................................	18
Appendix 1 - Citizens Financial Group, Inc. Pillar 3 Regulatory Disclosures Matrix ..................................	19
Appendix 2 - Forward-Looking Statements..................................................................................	22

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CITIZENS FINANCIAL GROUP, INC.

September 30, 2019 Pillar 3 Regulatory Disclosures

GLOSSARY OF ACRONYMS AND TERMS

The following listing provides a comprehensive reference of common acronyms and terms we regularly use in our financial reporting:

ALLL	Allowance for Loan and Lease Losses
AOCI	Accumulated Other Comprehensive Income (Loss)
BHC	Bank Holding Company
Board	The Board of Directors of Citizens Financial Group, Inc.
CBNA	Citizens Bank, National Association
CCAR	Comprehensive Capital Analysis and Review
CCB	Capital Conservation Buffer
CET1	Common Equity Tier 1
CET1 capital ratio	Common Equity Tier 1 capital divided by total risk-weighted assets as defined
	under the U.S. Basel III Standardized approach
Citizens, CFG, the Company, we,	Citizens Financial Group, Inc. and its Subsidiaries
us, or our
CRA	Community Reinvestment Act
CSA	Credit Support Annex
CVA	Credit Valuation Adjustment
Dodd-Frank Act	The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010
EGRRCPA	Economic Growth, Regulatory Relief, and Consumer Protection Act
FDIA	Federal Deposit Insurance Act
FHLB	Federal Home Loan Bank
FHLMC	Federal Home Loan Mortgage Corporation
FNMA	Federal National Mortgage Association
Form 10-K	Annual Report on Form 10-K
Form 10-Q	Quarterly Report on Form 10-Q
FR Y-9C	Regulatory Financial Statements for Bank Holding Companies
FRB	Board of Governors of the Federal Reserve System and, as applicable, Federal
	Reserve Bank(s)
GAAP	Accounting Principles Generally Accepted in the United States of America
GNMA	Government National Mortgage Association
MBS	Mortgage-Backed Securities
Mid-Atlantic	District of Columbia, Delaware, Maryland, New Jersey, New York, Pennsylvania,
	Virginia, and West Virginia
Midwest	Illinois, Indiana, Michigan, and Ohio
New England	Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont
NRSRO	Nationally Recognized Statistical Ratings Organizations
OCC	Office of the Comptroller of the Currency
OTC	Over the Counter
RWA	Risk-Weighted Assets
SBO	Serviced by Others portfolio
SSFA	Simplified Supervisory Formula Approach
Tier 1 capital ratio	Tier 1 capital, which includes Common Equity Tier 1 capital plus non-cumulative
	perpetual preferred equity that qualifies as additional tier 1 capital, divided by
	total risk-weighted assets as defined under the U.S. Basel III Standardized
	approach

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	CITIZENS FINANCIAL GROUP, INC.
	September 30, 2019 Pillar 3 Regulatory Disclosures
Tier 1 leverage ratio	Tier 1 capital, which includes Common Equity Tier 1 capital plus non-cumulative
	perpetual preferred equity that qualifies as additional tier 1 capital, divided by
	quarterly adjusted average assets as defined under the U.S. Basel III
	Standardized approach
Total capital ratio	Total capital, which includes Common Equity Tier 1 capital, tier 1 capital and
	allowance for credit losses and qualifying subordinated debt that qualifies as
	tier 2 capital, divided by total risk-weighted assets as defined under the U.S.
	Basel III Standardized approach
VaR	Value at Risk

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CITIZENS FINANCIAL GROUP, INC.

September 30, 2019 Pillar 3 Regulatory Disclosures

INTRODUCTION

Citizens Financial Group, Inc. is one of the nation's oldest and largest financial institutions with $164.4 billion in assets as of September 30, 2019. Our mission is to help our customers, colleagues and communities reach their potential by listening to them and by understanding their needs in order to offer tailored advice, ideas and solutions. Headquartered in Providence, Rhode Island, we offer a broad range of retail and commercial banking products and services to individuals, small businesses, middle-market companies, large corporations and institutions. In Consumer Banking, we provide an integrated experience that includes mobile and online banking, a 24/7 customer contact center as well as the convenience of approximately 2,900 ATMs and approximately 1,100 branches in 11 states in the New England, Mid-Atlantic, and Midwest regions. Consumer Banking products and services include a full range of banking, lending, savings, wealth management and small business offerings. In Commercial Banking, we offer corporate, institutional and not-for-profit clients a full range of wholesale banking products and services including lending and deposits, capital markets, treasury services, foreign exchange and interest rate products, and asset finance. More information is available at www.citizensbank.com.

Report Overview

We produce this report quarterly to update market participants regarding risk-based capital and risk exposures as required under U.S. regulations that interpret global regulatory standards known as "Basel III," established by the Basel Committee on Banking Supervision. The Basel Committee refers to this ongoing requirement as "Pillar 3 Regulatory Disclosures." This report provides information on our capital structure, risk exposures, risk assessment processes, RWA and overall capital adequacy. This report also includes information on the methodologies used to calculate RWA. This report is unaudited and should be read in conjunction with our 2018 Form 10-K and 3Q19 Form 10-Q, which include important information on risk management policies and practices, and our September 30, 2019 FR Y-9C. Appendix 1 of this report contains references to specific sections of our 2018 Form 10-K and 3Q19 Form 10-Q to facilitate location of applicable information.

This report may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statement that does not describe historical or current facts is a forward-looking statement, as discussed further in Appendix 2 of this report.

Scope of Application

The Basel III framework applies to CFG and its subsidiary bank, CBNA. CFG is a "standardized approach" and "AOCI opt-out" reporting institution under the U.S. Basel III Standardized approach. Our basis for consolidation used for regulatory financial statement reporting purposes is the same as the basis used for our financial statements prepared under GAAP. Please refer to Note 1 in our 2018 Form 10-K for more information on the basis for consolidation for financial reporting purposes.

Restrictions on transfers between CFG and CBNA

A number of regulations and statutes restrict transfers of funds and capital within CFG. CFG is a financial holding company and a BHC, regulated and supervised by the FRB. The OCC is the primary regulator and supervisor for CBNA. Applicable statutes and regulations that may pertain either to the BHC, CBNA, and all entities as affiliates may restrict transfers of funds and capital between these entities.

Sections 23A and 23B of the Federal Reserve Act and FRB Regulation W are the primary restrictors of lending, borrowing, and otherwise transacting business between affiliates. Please refer to Business - Regulation and Supervision - Transactions with Affiliates and Insiders in our 2018 Form 10-K for a discussion of these regulations.

Restrictions on the payment of dividends and other capital distributions within the group weigh most heavily on CBNA. The FRB expects a BHC to act as a "source of strength" to each individual subsidiary bank it holds, providing capital as needed. Consistent with this view, bank regulators ensure that a bank does not return capital to the BHC in a manner that would undermine its overall "safety and soundness." Therefore, CBNA is subject to specific qualitative and quantitative tests and examinations that may restrict it from paying dividends or otherwise returning capital to the BHC. For more information, please refer to Business - Regulation and Supervision in our 2018 Form

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