Citizens Financial Group (CFG -0.85%), a regional banking leader offering consumer and commercial financial services, released its second quarter fiscal 2025 results on July 17, 2025. The headline news was a beat on both EPS and revenue: the company reported non-GAAP EPS of $0.92 versus an expected $0.88, and revenue reached $2.04 billion, surpassing estimates. Compared to the same quarter last year, both EPS and revenue improved, with efficiency metrics showing incremental gains. The quarter showed stronger core earnings, higher contributions from strategic businesses, and better credit quality, though loan growth and some fee areas were subdued versus prior year trends.
| Metric | Q2 2025 | Q2 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $0.92 | $0.88 | $0.82 | 12 % |
| Revenue (Non-GAAP) | $2.04 billion | $2.01 billion | $1.96 billion | 4.1 % |
| Pre-provision Profit (Non-GAAP) | $718 million | $694 million | 3.5 % | |
| Net Income (Non-GAAP) | $436 million | $408 million | 6.9 % | |
| Efficiency Ratio (Non-GAAP) | 64.8 % | 64.6 % | 0.2 pp |
Source: Analyst estimates for the quarter provided by FactSet.
Business Overview and Core Focus Areas
Citizens Financial Group provides banking services for both individuals and businesses, including checking and savings accounts, loans, wealth management, and capital markets solutions. It operates primarily along the U.S. East Coast and Midwest, serving millions of retail customers, small businesses, and institutional clients.
The bank centers its strategy on growing customer relationships, expanding digital offerings, and keeping a strong risk management culture. In recent periods, it has invested in technology, upgraded its Private Bank and wealth initiatives, and managed its loan portfolio for better returns. Success depends on expanding its core deposit base, prudent lending, innovation in digital banking, and maintaining sound capital and liquidity ratios.
Quarter Highlights: Financial and Strategic Performance
This period saw Citizens Financial Group exceed estimates for both EPS and revenue. Pre-provision profit climbed 3.5 % over the prior year, with underlying operating leverage -- the difference between revenue and expense growth -- remaining positive. This progress was underpinned by gains in net interest income and noninterest fees.
The Private Bank, Citizens’ high-net-worth offering, contributed $0.06 to EPS, up from $0.04 in the previous quarter due to increased loan demand and higher deposits. Private Bank deposits rose $4.7 billion versus the prior year, while loans across the Private Bank, Commercial, and Consumer areas pushed overall loan balances up 1 % sequentially. Still, total loans fell 2 % from the year-ago period as managed runoffs in non-core portfolios continued to offset new loan production.
Fee income trends were mixed. Service charges and fees rose by $5 million year over year, mainly from higher overdraft and cash management activity. Mortgage banking fees grew $19 million and wealth management fees increased $13 million, but Capital Markets fees fell by $29 million. This decline reflected lower revenue from mergers and acquisitions and bond underwriting, as deal timing and market volatility affected activity levels.
Expenses remained controlled. The efficiency ratio, which measures costs as a percentage of revenue, edged up just 0.2 percentage points from the previous year. This was despite higher technology spending, an investment that supports Citizens’ ongoing digital transformation program. Net charge-offs, or unrecoverable loan balances, improved to 0.48 % of loans compared to 0.52 % last year, indicating favorable credit trends. Nonaccrual loans, or those not generating interest payments, declined 4 % from the first quarter.
Looking Forward: Guidance and Investor Considerations
Citizens Financial Group’s management reiterated its fiscal 2025 focus on improving net interest margin (NIM), containing costs, and raising returns for shareholders. Current targets include reaching a net interest margin of 3.05 % to 3.10 % by the end of 2025 and maintaining a common equity Tier 1 (CET1) capital ratio around 10.6 %, which supports both growth and capital returns. Management kept its quarterly dividend steady at $0.42 per share and maintained its share repurchase plan.
While no explicit EPS or revenue guidance was updated in the release, management called attention to the potential impact of macroeconomic trends on loan growth and fee income, especially in Capital Markets. Investors should watch for sustained progress in core loan generation, consistent expense discipline, further gains from digital initiatives, and the performance of strategic businesses like the Private Bank as the year continues.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
