Goldman Sachs’ Stocks With Highest Consensus Returns: 42 Stocks With The Highest Consensus ROE

24. Citizens Financial Group, Inc. (NYSE:CFG)

Consensus ROE: 14%

Number of Hedge Fund Investors in Q2 2024: 47

Citizens Financial Group, Inc. (NYSE:CFG) is a consumer and commercial banking company based in Rhode Island. The firm also has a private banking division, and its loan portfolio is quite diversified. This diversification is important, especially in the case of an economic downturn during which bank stocks are stressed because of the higher probability of defaults. As of Q2 2024, 20% of Citizens Financial Group, Inc. (NYSE:CFG)’s loan portfolio was accounted for by commercial real estate, which meant that its exposure to the troubled sector that has seen mega defaults in today’s high interest rate era was limited. A key risk factor for the bank is its $1 billion in education loans, which might be troubled if the US government succeeds with the Biden Administration’s loan forgiveness efforts. On the flip side, 21% of Citizens Financial Group, Inc. (NYSE:CFG)’s deposits are non interest paying demand deposits which allow it to stay nimble and keep costs under control as rates are high and others struggle.

Citizens Financial Group, Inc. (NYSE:CFG) is focused on growth through its private banking division. Here’s what management shared during the Q2 2024 earnings call:

“Finally, we’re building a premier private bank, and that is going very well and gaining momentum.

We’re growing our client base and now have about $4 billion of attractive deposits, a $1.6 billion increase from the prior quarter, with roughly 30% non-interest bearing. Also, we are now at $1.4 billion of loans and continuing to grow. We recently opened private banking offices in Mill Valley, California and Palm Beach, Florida, and we are opportunistically adding talent to bolster our banking and wealth capabilities with our Citizens Wealth Management business as the center piece of that effort. We added two exceptional asset management teams in the second quarter, one from San Francisco and the other from Boston, bringing the total private bank AUM to $3.6 billion, well on our way to hit our $10 billion target by the end of 2025. Importantly, our private bank revenue increased 68% to about $30 million in the second quarter, and we are on track to break even on the bottom line later this year.”