Citizens Financial Group ( NYSE: CFG ) on Tuesday turned in Q4 earnings that matched Wall Street expectations and drove up both Q/Q and Y/Y as net interest margin thanks to higher interest rates.
“We continue to focus on managing the balance sheet and interest rate position well given the macro environment, and we ended the year with a strong credit and capital position," said Chairman and CEO Bruce Van Saun.
Q4 underlying EPS of $1.32, matching the average analyst estimate, rose from $1.30 in Q3 and $1.26 in Q4 2021. Revenue of $2.20B, falling short of the $2.22B consensus, increased from $2.18B in Q3 and from $1.72B in the year-ago quarter.
Net interest income accelerated to $1.70B from $1.67B in the prior quarter and $1.13B a year before. That reflected a five-basis-point Q/Q increase and a 64-bp Y/Y increase in net interest margin (fully taxable equivalent) given higher interest rates, partially offset by higher funding costs.
For Q1 2023, the bank expects net interest income to dip around 2% from Q4 2022, and non-interest income is also expected to slip 2% versus Q4.
The company said it's lifting its medium-term target range for return on tangible common equity to 16%-18%.
Provision for credit losses was $132M in Q4, compared with $123M in Q3 and a benefit of $25M in Q4 2021.
Average loans and leases of $157.1B edged up from $156.9B in Q3 and $125.2B a year earlier. Average deposits also increased to $179.0B from $177.6B in Q3 and $153.0B in Q4 2021.
Conference call at 9:00 a.m. ET.
Earlier, Citizens Financial declared a quarterly dividend of $0.42 a share .
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Citizens Financial Q4 earnings rise as NIM advances on higher rates