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MarketScreener Homepage  >  Equities  >  Nyse  >  Citizens Financial Group, Inc.    CFG

CITIZENS FINANCIAL GROUP, INC.

(CFG)
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Citizens Financial : 3Q19 Pillar 3 Regulatory Disclosures

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11/06/2019 | 11:55am EST

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

1

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

2

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

3

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

4

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Citizens Financial Group Inc. published this content on 06 November 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 November 2019 16:54:07 UTC

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Financials (USD)
Sales 2020 6 635 M
EBIT 2020 2 762 M
Net income 2020 1 637 M
Debt 2020 -
Yield 2020 4,12%
P/E ratio 2020 9,75x
P/E ratio 2021 9,07x
Capi. / Sales2020 2,45x
Capi. / Sales2021 2,38x
Capitalization 16 290 M
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Number of Analysts 21
Average target price 44,45  $
Last Close Price 37,61  $
Spread / Highest target 30,3%
Spread / Average Target 18,2%
Spread / Lowest Target 9,01%
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Managers
NameTitle
Bruce Winfield van Saun Chairman & Chief Executive Officer
John F. Woods Vice Chairman & Chief Financial Officer
Michael Ruttledge Chief Information Officer
Charles John Koch Independent Director
Shivan S. Subramaniam Independent Director
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