Citizens Financial Group (NYSE:CFG) sees average loans rising 1.5-2% in Q4 with ~3% spot growth and net interest broadly stable to down slightly vs. Q3 given lower PPP forgiveness benefit.
Investors have been watching for rising loans at banks, as customers tended to avoid taking on debt during the pandemic. Increased loan activity also signals that consumers and businesses will increase their spending.
The bank also expects noninterest income to be broadly stable in Q4 vs. $514M in Q3 due to the seasonal decline in mortgage activity offset by strength in capital markets.
Q3 underlying EPS of $1.22 vs. $1.46 in Q2 an $0.73 in Q3 2020.
Citizens Financial's (CFG) underlying pre-provision profit of $671M increased from $629M in Q2 and fell from $834M in Q3 2020.
Q3 provision for credit loss benefit of $33M compares with a benefit of $213M in Q2 and cost of $428M in Q3 2020.
Net interest income of $1.15B rose from $1.12B in Q2 due to interest-earning asset growth and higher day count, with stable net interest margin; also increased from $1.14B in Q3 2020; net interest margin (FTE) 2.72%, unchanged from Q2 and down from 2.83% in the year-ago quarter.
Noninterest income of $514M rose 6% Q/Q and fell 21% Y/Y.
Mortgage banking fees of $108M rose 27% Q/Q and dropped 62% Y/Y; service charges and fees of $110M rose 10% Q/Q and 13% Y/Y.
Period-end loans and leases of $123.3B increased from $122.6B at the end of Q2 2021.
Period-end deposits of $152.2B increased from $150.6B in Q2.