Citizens Financial Group, Inc. (NYSE:CFG) Q4 2017 Earnings Conference Call - Preliminary Transcript

Jan 19, 2018 • 09:00 am ET

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Citizens Financial Group, Inc. (NYSE:CFG) Q4 2017 Earnings Conference Call - Preliminary Transcript

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Presentation
Operator
Operator

Good morning, everyone, and welcome to the Citizens Financial Group Fourth-Quarter and Full-Year 2018 Earnings Conference Call. My name is Brad, and I'll be your operator today. Currently, all participants are in a listen-only mode. Following the presentation, we'll conduct a brief question-and-answer session.

As a reminder, this event is being recorded. Now I'll turn the call over to Ellen Taylor, head of investor relations. Ellen, you may begin.

***Part 1 ****

Good morning, everyone, and welcome to the Citizens Financial Group Fourth-Quarter and Full-Year 2017 Earnings Conference Call. My name is Brad, and I'll be your operator today. Currently, all participants are in a listen-only mode. Following the presentation, we'll conduct a brief question-and-answer session.

As a reminder, this event is being recorded. Now I'll turn the call over to Ellen Taylor, head of investor relations. Ellen, you may begin.

Executive
Ellen Taylor

Hey, thanks, Brad. Good morning, everyone. We really appreciate you joining us this morning. We know it's a busy day.

We've got a lot of really positive ground to cover. Our chairman and CEO, Bruce Van Saun, and CFO John Woods will review our results and provide an update on our financial targets. And then we're going to open up the call for questions. Also joining us today in the room are Brad Conner, head of consumer banking, and Don McCree, head of commercial banking.

And, of course, our lawyers want me to remind everyone that in addition to today's press release, we've also provided a presentation and financial supplement, and these materials are available at investor.citizensbank.com, and our comments today will include forward-looking statements, which are subject to risks and uncertainties. We provide information about the factors that may cause our results to differ materially from expectations in our SEC filings, including the Form 8-K filed today. We also utilize non-GAAP financial measures and provide information and a reconciliation of those measures to GAAP in our SEC filings and earnings release materials. And with that, I'm going to hand it over to Bruce.

Executive
Bruce Van Saun

Okay. Thanks, Ellen. Good morning, everyone, and thanks for joining our call today. We're pleased to report another quarter of strong and improving results and a great finish to a year of significant progress and good execution.

We continue to run the bank better each and every day, we're taking good care of our customers, and we entered 2018 with some nice momentum. The highlights of the quarter, from my perspective, were the continued delivery of good top-line growth with 8% year-on-year underlying revenue growth as well as robust positive operating leverage of 6.4%. For the full year, underlying revenue growth was 10%, and the operating leverage was 6.8%. The commitment to positive operating leverage has powered improvement in our key metrics.

Our underlying ROTCE hit 10.4% in Q4, and our efficiency ratio improved to 58.5%. Our success in hitting our medium-term IPO financial targets has led to our establishment of new medium-term targets, which we will cover in some detail later in the call. Suffice