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Citizens Financial Group (NYSE:CFG) stock dipped 3.4% in Wednesday morning trading after the bank’s Q3 earnings and revenue missed Wall Street expectations as higher interest rates increased its funding costs.
For Q4, the bank expects net interest income to fall ~2% from Q3’s $1.52B and noninterest income to rise 3%-4% from $492M, depending on market conditions. Net charge-offs are expected to be in the mid-40 basis point range as compared with 40 bps in Q3.
Q3 underlying EPS of $0.89 vs. $0.91 consensus, fell from $1.04 in Q2 and $1.30 in Q3 2022. Revenue of $2.01B, trailing the $2.04B average analyst estimate, declined from $2.09B in the previous quarter and $2.18B a year ago.
Net interest income of $1.52B, missing the Bloomberg consensus of $1.53B, dropped from $1.59B in Q2 and $1.67B in Q3 2022. Net interest margin of 3.03% compared with 3.16% in the prior quarter and 3.24% a year ago.
Provision for credit losses fell to $172M from $176M in Q2 and increased from $123M in Q3 2022.
Deposits totaled $178.2B at the end of the quarter, compared with $177.7B at the end of Q2. Loans and leases at Sept. 30, 2023 were $149.7B vs. $151.3B at June 30, 2023.
“We will continue to play strong defense given the external environment, while advancing important strategic initiatives,” said CEO and Chairman Bruce Van Saun.
