3 Tailwinds That Should Boost Citizens Financial Group This Year
The $183 billion asset Citizens Financial Group (NYSE: CFG) based in Rhode Island has been enjoying a nice year thus far in 2021, with its stock currently up roughly 34% year to date. While most of the banking industry has done well, and Citizens will enjoy the same tailwinds as the rest of the sector, the bank has some unique levers that could make it a standout in the industry this year.
A lot of banks are optimistic that loan growth will pick up in the back half of the year after a sluggish start in the first quarter. But at this point, it's really just optimism. Citizens Financial seems to have some real confidence -- and perhaps even tangible proof -- that it will see loan growth in 2021. The bank projected 1% to 2% of loan growth in the second quarter, followed by an acceleration in the back half of the year. This is a pretty strong forecast, considering one of Citizens' peers, PNC Financial Services Group (NYSE: PNC), is guiding for average loan balances to drop 3% to 4% at the bank this year.
Citizens' unique consumer loan portfolio gives the bank an edge with its auto and student lending portfolios, as well as its fast-growing point-of-sale business. Auto lending has been one of the few bright spots for banks thus far, and Citizens grew its auto loan book 1% in the first quarter. Citizens' CFO John Woods said the auto market is on fire and that he thinks the bank can continue to grow the segment with a double-digit return on equity.
Source Fool.com