Fitch Upgrades Citizens Financial to 'A-' on Improved Profitability and Diversification

Fitch Ratings has upgraded the long-term issuer default rating for Citizens Financial Group (NYSE: CFG) and its main operating subsidiary to 'A-' from 'BBB+', citing the bank's sustained improvements in profitability and earnings diversification. The rating agency assigned a Stable outlook to the new rating, signaling confidence in the bank's financial trajectory.

Rationale for the Upgrade

The upgrade reflects a multi-year effort by Citizens to bolster its financial performance, according to Fitch. The agency highlighted the bank's success in expanding its profit margins through asset repricing while maintaining stable credit costs. This has brought its credit profile in line with similarly rated large regional banking peers.

Fitch also credited Citizens' long-term strategic investments in businesses that generate fee income. The bank's focus on growing its capital markets, wealth management, and private banking divisions has led to market share gains, stronger income growth, and a more diversified revenue stream, reducing its reliance on traditional lending.

Key Financial Metrics

The ratings action was supported by several positive financial trends reported by the bank. Non-interest income grew to represent 28% of total revenue in the first half of 2026, underscoring the success of its diversification strategy.

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Key growth figures from the second quarter of 2026 include:

• Operating Profit: Rose to 1.6% of risk-weighted assets, up from a trough of 1.1% in 2024.
• Capital Markets Revenue: Increased 52% year-over-year.
• Wealth Management Revenue: Grew 16% year-over-year.
• Private Bank Assets: Assets under management increased 48% year-over-year.

Asset Quality and Capitalization

Citizens Financial's asset quality has remained stable, with its impaired loan ratio holding at 1.8% in the second quarter of 2026. Fitch noted that legacy commercial real estate loans comprise roughly two-thirds of these impaired assets. The firm's net charge-off ratio has improved, falling to 38 basis points from a peak of 57 basis points in the first quarter of 2025.

The bank's capital position remains solid. Its Common Equity Tier 1 (CET1) ratio stood at 10.4% at the end of the second quarter, comfortably within its target range of 10.0% to 10.5%. In addition to the long-term rating, Fitch also upgraded the bank's Viability Rating to 'a-' from 'bbb+', while affirming its short-term rating at 'F1'.