Black Friday is Now! Don’t miss out on up to 60% OFF InvestingProCLAIM SALE

Citizens Financial downgraded at JPMorgan

Published 06/29/2023, 04:02 PM
© Reuters.  Citizens Financial downgraded at JPMorgan
CFG
-

JPMorgan downgraded Citizens Financial Group (NYSE:CFG) to Neutral from Overweight and cut its price target to $27 from $29, citing concerns about the bank's capital requirements and profitability levels.

The recent 2023 DFAST results showed that all banks in JPMorgan’s coverage had capital in excess of minimum requirements, but Citizens is expected to face increased capital requirements, leading to pressure on profitability.

According to the firm, Citizens has a lower cushion relative to peers above minimum CET1 requirements based on 3/31 levels and has continued to buy back stock in Q2.

The bank also faces challenges from high losses on commercial real estate (CRE) loans due to the high level of maturities of office CRE loans in 2023 and 2024. Citizens recently increased its outlook for Q2 NCOs to the 40ish bp range. The bank’s increase in capital erosion in DFAST ‘23 was driven by increased loan loss provisions.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.