Citizens Financial Group, Inc. is set to announce its third-quarter 2024 results on October 16th. It is anticipated that the company’s earnings and revenues for this quarter will be lower compared to the same period last year. In the second quarter of 2024, Citizens Financial Group’s earnings fell short of the Zacks Consensus Estimate due to a decrease in net interest income, higher provisions, and operating expenses. However, there was a boost in non-interest income and a decrease in allowance for credit losses, which provided some support.
The company has missed the Zacks Consensus Estimate for earnings in the past four consecutive quarters, with an average negative surprise of 16.39%. Factors that are expected to influence Citizens Financial Group’s third-quarter earnings include the lending scenario, net interest income, and non-interest income.
In terms of loans, the Federal Reserve’s rate cut path and a stable macroeconomic environment are likely to have supported the lending landscape. Commercial and industrial and consumer loan demand were modest in the first two months of the quarter, while commercial real estate loan demand remained subdued. The company’s lending book may have benefited from improvements in commercial loans, although the weak real estate loan demand could have offset some growth.
Net interest income may have been impacted by the Federal Reserve’s interest rate cut in September, despite potential long-term benefits. Citizens Financial Group expects a 1-2% decrease in net interest income compared to the previous quarter. Non-interest income, on the other hand, may see a boost from lower mortgage rates leading to increased refinancing activities.
Global mergers and acquisitions in the third quarter showed improvement, which could positively impact the company’s capital markets fees. Efforts to enhance deposit balances through strategic acquisitions may have also aided service charge and fee revenues. Management anticipates a slight increase in fee income for the third quarter.
Expenses are expected to have increased due to investments in private banking offices, franchise expansion, and technological advancements. Asset quality is another factor to watch, especially in terms of setting aside money for potential bad loans.
Our model predicts an earnings beat for Citizens Financial Group this quarter, with a positive Earnings ESP and Zacks Rank. Other bank stocks to consider for potential earnings beats include First Horizon Corporation and M&T Bank Corporation.
Overall, while there may be challenges in terms of net interest income and expenses, non-interest income and fee income are expected to provide some support to Citizens Financial Group’s third-quarter earnings. Investors should keep an eye on the company’s performance in the coming days to see how it fares in a challenging economic environment.