Wednesday, January 23, 2019

Citizens Financial An Intriguing Mix Of Opportunity And Challenges

Trying to figure out stocks like Citizens Financial (CFG) might be why I have more than my fair share of grey hair, as there are a lot of intriguing and attractive aspects to the story (including the valuation), but almost as many challenges and issues that may make an investor pause. Although Citizens is one of the largest banks in the country (#13 in assets) and operates in 11 states, it doesn’t really have great deposit share in its biggest MSAs, nor attractively-priced deposits. Likewise, Citizens has done a lot to improve its profitability, but that includes shifting the loan mix towards some riskier categories and that could have repercussions when the credit cycle turns.

On balance, I do think Citizens is worth a close look, maybe if for no other reason than it is likely to be one of the stronger large banks in terms of pre-provision earnings growth over the next two to three years and challenges in categories like CRE aren’t too relevant.

Click here for more:
Citizens Financial An Intriguing Mix Of Opportunity And Challenges

No comments: