Regional banking company Citizens Financial Group (NYSE: CFG) beat Wall Street’s revenue expectations in Q3 CY2025, with sales up 11.4% year on year to $2.12 billion. Its GAAP profit of $1.05 per share was 2.3% above analysts’ consensus estimates.
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Citizens Financial Group (CFG) Q3 CY2025 Highlights:
- Net Interest Income: $1.49 billion vs analyst estimates of $1.49 billion (8.7% year-on-year growth, in line)
- Net Interest Margin: 3% vs analyst estimates of 3% (in line)
- Revenue: $2.12 billion vs analyst estimates of $2.10 billion (11.4% year-on-year growth, 0.9% beat)
- Efficiency Ratio: 63% vs analyst estimates of 63.5% (45.9 basis point beat)
- EPS (GAAP): $1.05 vs analyst estimates of $1.03 (2.3% beat)
- Tangible Book Value per Share: $36.73 vs analyst estimates of $35.98 (12.8% year-on-year growth, 2.1% beat)
- Market Capitalization: $22.34 billion
Company Overview
Tracing its roots back to 1828 as a community-focused institution, Citizens Financial Group (NYSE: CFG) is a regional bank that provides retail and commercial banking services to individuals, small businesses, and large corporations across 14 states.
Sales Growth
Two primary revenue streams drive bank earnings. While net interest income, which is earned by charging higher rates on loans than paid on deposits, forms the foundation, fee-based services across banking, credit, wealth management, and trading operations provide additional income. Regrettably, Citizens Financial Group’s revenue grew at a mediocre 3.4% compounded annual growth rate over the last five years. This was below our standard for the banking sector and is a poor baseline for our analysis.
Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. Citizens Financial Group’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 2.2% annually. 
Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.
This quarter, Citizens Financial Group reported year-on-year revenue growth of 11.4%, and its $2.12 billion of revenue exceeded Wall Street’s estimates by 0.9%.
Net interest income made up 72.1% of the company’s total revenue during the last five years, meaning lending operations are Citizens Financial Group’s largest source of revenue.
Net interest income commands greater market attention due to its reliability and consistency, whereas non-interest income is often seen as lower-quality revenue that lacks the same dependable characteristics.
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Tangible Book Value Per Share (TBVPS)
Banks are balance sheet-driven businesses because they generate earnings primarily through borrowing and lending. They’re also valued based on their balance sheet strength and ability to compound book value (another name for shareholders’ equity) over time.
This is why we consider tangible book value per share (TBVPS) the most important metric to track for banks. TBVPS represents the real, liquid net worth per share of a bank, excluding intangible assets that have debatable value upon liquidation. Other (and more commonly known) per-share metrics like EPS can sometimes be murky due to M&A or accounting rules allowing for loan losses to be spread out.
Citizens Financial Group’s TBVPS grew at a tepid 3.1% annual clip over the last five years. However, TBVPS growth has accelerated recently, growing by 17% annually over the last two years from $26.83 to $36.73 per share.
Over the next 12 months, Consensus estimates call for Citizens Financial Group’s TBVPS to grow by 5.9% to $38.89, mediocre growth rate.
Key Takeaways from Citizens Financial Group’s Q3 Results
It was encouraging to see Citizens Financial Group beat analysts’ tangible book value per share expectations this quarter. We were also happy its revenue narrowly outperformed Wall Street’s estimates. On the other hand, net interest income and net interest margin were only in line. Investors were likely hoping for more, and shares traded down 1.2% to $51.16 immediately after reporting.
Is Citizens Financial Group an attractive investment opportunity right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.
