Morningstar DBRS Revises Citizens Financial Group, Inc.'s Trend to Positive; Confirms Long-Term Issuer Rating at A (Low)

Why It Matters

The Positive trend may lower funding costs and bolster investor confidence, reinforcing Citizens’ competitive position in the regional banking market.

Key Takeaways

• Citizens' trend upgraded to Positive, reflecting strategic momentum
• Total assets reached $227.9 billion as of Q1 2026
• CET1 ratio at 10.5%, top of medium‑term range
• Private banking deposits target $18‑20 billion by year‑end 2026
• NCO ratio fell to 39 bps, down from 58 bps year‑ago

Pulse Analysis

Morningstar DBRS’s decision to keep Citizens Financial Group’s long‑term issuer rating at A (low) while shifting the trend to Positive underscores the bank’s steady execution of its post‑spin‑off transformation. The rating agency cited the successful integration of the 2022 Investors Bancorp and HSBC East Coast acquisitions, which expanded Citizens’ footprint across New England, the Mid‑Atlantic and the Midwest. This geographic diversification, coupled with the launch of a private‑banking platform in 2023, has fortified the franchise in affluent markets and positioned the bank for incremental revenue streams.

Financially, Citizens shows a resilient balance sheet. At the end of Q1 2026, total assets stood at $227.9 billion and the loan‑to‑deposit ratio was a modest 78%, well below historical averages. The bank’s CET1 ratio of 10.5% sits at the upper bound of its medium‑term operating range, providing a 150‑basis‑point buffer above regulatory requirements. Asset quality metrics are improving, with the non‑core‑officer ratio dropping to 39 bps from 58 bps a year earlier, and an allowance ratio of 1.36% deemed appropriate for its risk profile.

The upgraded trend carries tangible market implications. A Positive outlook can translate into lower borrowing costs and stronger demand for Citizens’ debt securities, benefitting both the institution and its investors. Moreover, the bank’s strategic “Reimagine the Bank” initiative, targeting a $450 million pre‑tax run‑rate benefit by 2028, signals a clear path toward its 16‑18% return on tangible common equity target. As the private‑banking segment aims to reach $18‑20 billion in deposits by year‑end 2026, the rating reinforces confidence that Citizens can sustain earnings growth while navigating a challenging macro environment.