Investment
The Motley Fool

Why Citizens Financial Group Stock Soared in June

July 6, 2025
07:23 AM
3 min read
AI Enhanced
economymoneystocksfinancialfinancialsbankingmarket cyclesseasonal analysis

Key Takeaways

A seriously bulked-up repurchase plan and good results of the Federal Reserve's banking industry stress test imved the price of regional lender Citizens Financial Group (CFG 1. 45%) in June. Over...

Article Overview

Quick insights and key information

Reading Time

3 min read

Estimated completion

Category

investment

Article classification

Published

July 6, 2025

07:23 AM

Source

The Motley Fool

Original publisher

Key Topics
economymoneystocksfinancialfinancialsbankingmarket cyclesseasonal analysis

A seriously bulked-up repurchase plan and good results of the Federal Reserve's banking industry stress test imved the price of regional lender Citizens Financial Group (CFG 1. 45%) in June

Over the course of the month, investors traded the bank's stock up by nearly 11% in reaction to this

Not so stressed The rally basically started in the middle of the month, when Citizens announced that stock buyback news

To the satisfaction of its holders, the company said it would bolster the existing gram by a hefty $1

As there was $300 million remaining from the previous authorization, granted in June 2024, the new total is $1

Image source: Getty Images

For a stock with a sub-$21 billion market cap, that's substantial, and it should have a positive impact on the price

A more critical, industrywide development occurred at the end of the month with the stress tests

For those unfamiliar, these are an annual set of analyses in which major U

Banks are tested to see how they would weather adverse economic conditions, some of which are quite drastic

As has become the norm, the institutions under the microscope -- which include the "big four" American lenders, Bank of America, JPMorgan Chase, Wells Fargo, and Citigroup -- did quite well

All 22 passed their tests, albeit with the caveat that this year's edition was less rigorous than previous rounds

Citizens Financial isn't sizable enough to go through this wringer annually, instead it's tested every two years, and in 2025 it got a break

Still, there were several regional banks not un itself among the 22 tested

All in all, the good results were taken to mean that mid- and large-sized banks in this country are generally doing well, and in the worst-case scenarios can bably cope with catastrophe

I don't blame investors of Citizens Financial -- or any other bank of its size on this market -- for reacting positively to the stress test results

Despite some cuts and scrapes lately, our economy has been performing well, and the smart and disciplined apach of its better lenders is an ever-important factor in this

Having said that, I'm not all that excited Citizen Financial's performance recently

In its first quarter revenue was essentially stagnant, as was the company's end-quarter deposits figure

And average loans and leases slumped, even as a bump in non-interest income pushed headline net fit 12% higher to $374 million

To me, it's the larger banks that have better potential these days

Wells Fargo is an advertising partner of Motley Fool Money

Bank of America is an advertising partner of Motley Fool Money

Citigroup is an advertising partner of Motley Fool Money

JPMorgan Chase is an advertising partner of Motley Fool Money

Eric Volkman has no position in any of the stocks mentioned

The Motley Fool has positions in and recommends Bank of America and JPMorgan Chase

The Motley Fool has a disclosure policy.