DBRS Assigns Citizens Financial Group’s Preferred Stock at BBB (low), Stable Trend

DBRS, Inc. (DBRS) has assigned a Preferred Stock rating of BBB (low) with a stable trend to Citizens Financial Group, Inc. (Citizens or the Company). The rating is positioned three notches below the Company’s Long-Term Issuer Rating of A (low) as per DBRS’s typical notching for these type of instruments.

Citizens has issued approximately $1.1 billion of preferred stock, including its most recent issuance of $300 million in January 2019. Overall, Citizens’ capital levels remain strong, including a Tier 1 Capital ratio of 11.3%, despite ongoing capital management activity and balance sheet growth.

RATING DRIVERS
Continued momentum enhancing the franchise, growing the level of earnings, including building the percentage of non-interest income, while maintaining a sound balance sheet could lead to positive rating implications. Conversely, a reversion to weaker profitability metrics, or a sustained increase in credit losses that exceed peer levels; especially should they result from a perceived increase in risk appetite or weak underwriting, could have negative rating implications.

The Grid Summary Grades for Citizens are as follows: Franchise Strength – Strong; Earnings Power – Good; Risk Profile – Good; Funding & Liquidity – Strong; Capitalisation – Strong.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The applicable methodology is the Global Methodology for Rating Banks and Banking Organisations (July 2018), which can be found on our website under Methodologies.

The primary sources of information used for this rating include company documents and SNL Financial. DBRS considers the information available to it for the purposes of providing this rating was of satisfactory quality.

Lead Analyst: John Mackerey, Senior Vice President – Global FIG
Rating Committee Chair: Michael Driscoll, Managing Director, Head of NA FIG – Global FIG

The rated entity or its related entities did participate in the rating process for this rating action. DBRS had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

For more information on this credit or on this industry, visit www.dbrs.com.

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