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Teachers fund eliminates stake in Citizens Financial Group

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Mar. 24 2015, Updated 10:05 p.m. ET

Teachers and Citizens Financial Group

The Ontario Teachers’ Pension Plan, also known as “Teachers,” sold its position in Citizens Financial Group (CFG) during the quarter that ended in December. The position accounted for a small 0.06% of the fund’s total portfolio in the third quarter.

Citizens Financial Group makes up 0.03% of the iShares Russell 1000 Value ETF (IWD).

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Overview of Citizens Financial Group

CFG is a retail bank holding company. It delivers a broad range of retail and commercial banking products and services to more than five million individuals, institutions, and companies. It had $131.3 billion in total assets as of September 30, 2014. It operates its business through two operating segments—Consumer Banking and Commercial Banking.

CFG is based in Rhode Island and is the US subsidiary of Royal Bank of Scotland Group (RBS). The company raised $3 billion from an initial public offering in September 2014.

Higher Tier 1 capital ratio compared to peer average

CFG’s Tier 1 capital ratio was 12.4% at the end of December 2014. The ratio is a key measure of a bank’s strength and capital adequacy. A presentation by CFG showed a higher ratio than the peer average of 10.4%. CFG compares itself to BB&T (BBT), Comerica (CMA), Fifth Third (FITB), KeyCorp (KEY), M&T (MTB), PNC (PNC), Regions (RF), SunTrust (STI), and US Bancorp (USB).

Posts robust 4Q14 results

Citizen Financial Group posted fourth-quarter net income of $197 million, or $0.36 per diluted common share, up from $152 million, or $0.27 per diluted common share, for the fourth quarter of 2013. It generated total revenue of $1.2 billion, up 2%. A statement said that the company saw “3% average loan growth, continued overall strong credit quality and good expense discipline.” CFG’s revenue and earnings beat Wall Street estimates.

The next part of this series will look at the Teachers position update in Canadian Natural Resources. 

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