10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended

March 31, 2016

[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period From

(Not Applicable)

Commission File Number 001-36636

CITIZENS FINANCIAL GROUP, INC.

(Exact name of the registrant as specified in its charter)

Delaware	05-0412693
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification Number)

One Citizens Plaza, Providence, RI 02903

(Address of principal executive offices, including zip code)

(401) 456-7000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days.

[ü] Yes [] No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

[ü] Yes [ ] No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer [ü] Accelerated filer [ ]

Non-accelerated filer (Do not check if a smaller reporting company) [ ] Smaller reporting company [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). [ ] Yes [ü] No

There were 528,980,180 shares of Registrant’s common stock ($0.01 par value) outstanding on May 2, 2016.

	Table of Contents
Glossary of Acronyms and Terms		3
Part I. Financial Information		5
Item 1. Financial Statements		5
Consolidated Balance Sheets as of March 31, 2016 (unaudited) and December 31, 2015 (unaudited)		6
Consolidated Statements of Operations (unaudited) for the Three Months Ended March 31, 2016 and 2015		7
Consolidated Statements of Comprehensive Income (unaudited) for the Three Months Ended March 31, 2016 and 2015		8
Consolidated Statements of Changes in Stockholders’ Equity (unaudited) for the Three Months Ended March 31, 2016 and 2015		9
Consolidated Statements of Cash Flows (unaudited) for the Three Months Ended March 31, 2016 and 2015		10
Notes to the Consolidated Financial Statements (unaudited)		11
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations		55
Item 3. Quantitative and Qualitative Disclosures about Market Risk		109
Item 4. Controls and Procedures		109
Part II. Other Information		110
Item 1. Legal Proceedings		110
Item 1A. Risk Factors		110
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		110
Item 5. Other Information		110
Item 6. Exhibits		111
Signature		112

2

CITIZENS FINANCIAL GROUP, INC.

GLOSSARY OF ACRONYMS AND TERMS

The following listing provides a comprehensive reference of common acronyms and terms we regularly use in our financial reporting:

AFS	Available for Sale
ALLL	Allowance for Loan and Lease Losses
AOCI	Accumulated Other Comprehensive Income (Loss)
ASU	Accounting Standards Update
ATM	Automated Teller Machine
BHC	Bank Holding Company
bps	Basis Points
C&I	Commercial and Industrial
Capital Plan Rule	Federal Reserve’s Regulation Y Capital Plan Rule
CBNA	Citizens Bank, N.A.
CBPA	Citizens Bank of Pennsylvania
CCAR	Comprehensive Capital Analysis and Review
CCB	Capital Conservation Buffer
CCO	Chief Credit Officer
CET1	Common Equity Tier 1
CEO	Chief Executive Officer
CFPB	Consumer Financial Protection Bureau
Citizens or CFG or the Company	Citizens Financial Group, Inc. and its Subsidiaries
CLTV	Combined Loan to Value
CMO	Collateralized Mortgage Obligation
CRE	Commercial Real Estate
CRO	Chief Risk Officer
DFAST	Dodd-Frank Act Stress Test
Dodd-Frank Act	The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010
EPS	Earnings Per Share
ERISA	Employee Retirement Income Security Act of 1974
Fannie Mae (FNMA)	Federal National Mortgage Association
FASB	Financial Accounting Standards Board
FDIA	Federal Deposit Insurance Act
FDIC	Federal Deposit Insurance Corporation
FHLB	Federal Home Loan Bank
FICO	Fair Isaac Corporation (credit rating)
FRB	Federal Reserve Bank
FRBG	Federal Reserve Board of Governors
Freddie Mac (FHLMC)	Federal Home Loan Mortgage Corporation
FTP	Funds Transfer Pricing
GAAP	Accounting Principles Generally Accepted in the United States of America
GDP	Gross Domestic Product
Ginnie Mae (GNMA)	Government National Mortgage Association
HELOC	Home Equity Line of Credit
HTM	Held To Maturity
IPO	Initial Public Offering

3

CITIZENS FINANCIAL GROUP, INC.

LCR	Liquidity Coverage Ratio
LGD	Loss Given Default
LIBOR	London Interbank Offered Rate
LIHTC	Low Income Housing Tax Credit
LTV	Loan to Value
MBS	Mortgage-Backed Securities
MSR	Mortgage Servicing Right
NSFR	Net Stable Funding Ratio
OCC	Office of the Comptroller of the Currency
OCI	Other Comprehensive Income
OIS	Overnight Index Swap
PD	Probability of Default
peers or peer banks or peer regional banks	BB&T, Comerica, Fifth Third, KeyCorp, M&T, PNC, Regions, SunTrust and U.S. Bancorp
RBS	The Royal Bank of Scotland Group plc or any of its subsidiaries
ROTCE	Return on Average Tangible Common Equity
RPA	Risk Participation Agreement
RWA	Risk-weighted Assets
SBO	Serviced by Others loan portfolio
SEC	United States Securities and Exchange Commission
SVaR	Stressed Value at Risk
TDR	Troubled Debt Restructuring
VaR	Value at Risk

4

CITIZENS FINANCIAL GROUP, INC.

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

	Page
Consolidated Balance Sheets as of March 31, 2015 (unaudited) and December 31, 2015 (unaudited)	6
Consolidated Statements of Operations (unaudited) for the Three Months Ended March 31, 2016 and 2015	7
Consolidated Statements of Comprehensive Income (unaudited) for the Three Months Ended March 31, 2016 and 2015	8
Consolidated Statements of Changes in Stockholders' Equity (unaudited) for the Three Months Ended March 31, 2016 and 2015	9
Consolidated Statements of Cash Flows (unaudited) for the Three Months Ended March 31, 2016 and 2015	10
Notes to Consolidated Financial Statements (unaudited)	11
Note 1 - Basis of Presentation	11
Note 2 - Securities	12
Note 3 - Loans and Leases	17
Note 4 - Allowance for Credit Losses, Nonperforming Assets, and Concentrations of Credit Risk	18
Note 5 - Variable Interest Entities	28
Note 6 - Mortgage Banking	29
Note 7 - Borrowed Funds	31
Note 8 - Stockholders' Equity	33
Note 9 - Employee Benefits	34
Note 10 - Income Taxes	34
Note 11 - Derivatives	34
Note 12 - Commitments and Contingencies	38
Note 13 - Related Party Transactions and Significant Transactions With RBS	40
Note 14 - Fair Value Measurements	41
Note 15 - Regulatory Matters	48
Note 16 - Exit Costs and Restructuring Reserves	50
Note 17 - Reclassifications Out of Accumulated Other Comprehensive Income (Loss)	50
Note 18 - Business Segments	51
Note 19 - Earnings Per Share	54
Note 20 - Other Operating Expense	54
Note 21 - Subsequent Events	54

5

CITIZENS FINANCIAL GROUP, INC.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in millions, except share data)	March 31, 2016			December 31, 2015
ASSETS:
Cash and due from banks		$839			$1,099
Interest-bearing cash and due from banks	1,016			1,986
Interest-bearing deposits in banks	534			356
Securities available for sale, at fair value (including $297 and $4,283 pledged to creditors, respectively) (a)	17,964			17,884
Securities held to maturity (including $0 and $135 pledged to creditors, respectively, and fair value of $5,261 and $5,297, respectively) (a)	5,129			5,258
Other investment securities, at fair value	68			70
Other investment securities, at cost	896			863
Loans held for sale, at fair value	365			325
Other loans held for sale	386			40
Loans and leases	100,991			99,042
Less: Allowance for loan and lease losses	1,224			1,216
Net loans and leases	99,767			97,826
Derivative assets	1,068			625
Premises and equipment, net	570			595
Bank-owned life insurance	1,576			1,564
Goodwill	6,876			6,876
Due from broker	161			—
Other assets	2,862			2,841
TOTAL ASSETS		$140,077			$138,208
LIABILITIES AND STOCKHOLDERS’ EQUITY:
LIABILITIES:
Deposits:
Noninterest-bearing		$27,186			$27,649
Interest-bearing	75,420			74,890
Total deposits	102,606			102,539
Federal funds purchased and securities sold under agreements to repurchase	714			802
Other short-term borrowed funds	3,300			2,630
Derivative liabilities	832			485
Deferred taxes, net	852			730
Long-term borrowed funds (RBS balances of $1,125 and $1,250, respectively)	10,035			9,886
Due to broker	276			—
Other liabilities	1,497			1,490
TOTAL LIABILITIES		$120,112			$118,562
Contingencies (refer to Note 12)
STOCKHOLDERS’ EQUITY:
Preferred stock, $25.00 par value, authorized 100,000,000 shares:
Series A, non-cumulative perpetual, $25.00 par value (liquidation preference $1,000), 250,000 shares authorized and issued net of issuance costs and related premium at March 31, 2016 and December 31, 2015		$247			$247
Common stock:
$0.01 par value, 1,000,000,000 shares authorized, 564,276,714 shares issued and 528,933,727 shares outstanding at March 31, 2016 and 1,000,000,000 shares authorized, 563,117,415 shares issued and 527,774,428 shares outstanding at December 31, 2015	6			6
Additional paid-in capital	18,730			18,725
Retained earnings	2,076			1,913
Treasury Stock, at cost, 35,342,987 shares at March 31, 2016 and December 31, 2015.	(858		)	(858		)
Accumulated other comprehensive loss	(236		)	(387		)
TOTAL STOCKHOLDERS’ EQUITY		$19,965			$19,646
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$140,077			$138,208

(a) Includes only collateral pledged by the Company where counterparties have the right to sell or pledge the collateral.

The accompanying Notes to unaudited interim Consolidated Financial Statements are an integral part of these statements.

6

CITIZENS FINANCIAL GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

	Three Months Ended March 31,
(in millions, except share and per-share data)	2016			2015
INTEREST INCOME:
Interest and fees on loans and leases		$868			$779
Interest and fees on loans held for sale, at fair value	3			2
Interest and fees on other loans held for sale	1			1
Investment securities	145			159
Interest-bearing deposits in banks	2			1
Total interest income	1,019			942
INTEREST EXPENSE:
Deposits	60			52
Federal funds purchased and securities sold under agreements to repurchase	1			7
Other short-term borrowed funds	11			15
Long-term borrowed funds (RBS balances of $11 and $20, respectively)	43			32
Total interest expense	115			106
Net interest income	904			836
Provision for credit losses	91			58
Net interest income after provision for credit losses	813			778
NONINTEREST INCOME:
Service charges and fees	144			135
Card fees	50			52
Trust and investment services fees	37			36
Capital markets fees	22			22
Foreign exchange and letter of credit fees	21			23
Mortgage banking fees	18			33
Bank-owned life insurance income	13			12
Securities gains, net	9			8
Net securities impairment losses recognized in earnings	(1		)	(1		)
Other income	17			27
Total noninterest income	330			347
NONINTEREST EXPENSE:
Salaries and employee benefits	425			419
Outside services	91			79
Occupancy	76			80
Equipment expense	65			63
Amortization of software	39			36
Other operating expense	115			133
Total noninterest expense	811			810
Income before income tax expense	332			315
Income tax expense	109			106
NET INCOME		$223			$209
Net income available to common stockholders	$216			$209
Weighted-average common shares outstanding:
Basic	528,070,648			546,291,363
Diluted	530,446,188			549,798,717
Per common share information:
Basic earnings		$0.41			$0.38
Diluted earnings	0.41			0.38
Dividends declared and paid	0.10			0.10

The accompanying Notes to unaudited interim Consolidated Financial Statements are an integral part of these statements.

7

CITIZENS FINANCIAL GROUP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

	Three Months Ended March 31,
(in millions)	2016			2015
Net income		$223			$209
Other comprehensive income:
Net unrealized derivative instrument gains arising during the periods, net of income taxes of $21 and $39, respectively	33			65
Reclassification adjustment for net derivative gains included in net income, net of income taxes of ($6) and ($1), respectively	(8		)	(2		)
Net unrealized securities available for sale gains arising during the periods, net of income taxes of $92 and $54, respectively	154			90
Other-than-temporary impairment not recognized in earnings on securities, net of income taxes of ($15) and ($11), respectively	(25		)	(19		)
Reclassification of net securities gains to net income, net of income taxes of ($3) and ($3), respectively	(5		)	(4		)
Defined benefit pension plans:
Amortization of actuarial loss, net of income taxes $2 and $1, respectively	2			2
Total other comprehensive income, net of income taxes	151			132
Total comprehensive income		$374			$341

The accompanying Notes to unaudited interim Consolidated Financial Statements are an integral part of these statements.

8

CITIZENS FINANCIAL GROUP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)

	Preferred Stock			Common Stock			Additional Paid-in Capital		Retained Earnings			Treasury Stock, at Cost			Accumulated Other Comprehensive Income (Loss)			Total
(in millions)	Shares	Amount		Shares	Amount
Balance at January 1, 2015	—		$—	546		$6		$18,676		$1,294			($336	)		($372	)		$19,268
Dividends to common stockholders	—	—		—	—		—		(16		)	—			—			(16		)
Dividends to RBS	—	—		—	—		—		(39		)	—			—			(39		)
Share-based compensation plans	—	—		1	—		29		—			(21		)	—			8
Employee stock purchase plan shares purchased	—	—		—	—		2		—			—			—			2
Total comprehensive income:
Net income	—	—		—	—		—		209			—			—			209
Other comprehensive income	—	—		—	—		—		—			—			132			132
Total comprehensive income	—	—		—	—		—		209			—			132			341
Balance at March 31, 2015	—		$—	547		$6		$18,707		$1,448			($357	)		($240	)		$19,564
Balance at January 1, 2016	—		$247	528		$6		$18,725		$1,913			($858	)		($387	)		$19,646
Dividends to common stockholders	—	—		—	—		—		(53		)	—			—			(53		)
Dividend to preferred stockholders	—	—		—	—		—		(7		)	—			—			(7		)
Share-based compensation plans	—	—		1	—		2		—			—			—			2
Employee stock purchase plan shares purchased	—	—		—	—		3		—			—			—			3
Total comprehensive income:
Net income	—	—		—	—		—		223			—			—			223
Other comprehensive income	—	—		—	—		—		—			—			151			151
Total comprehensive income	—	—		—	—		—		223			—			151			374
Balance at March 31, 2016	—		$247	529		$6		$18,730		$2,076			($858	)		($236	)		$19,965

The accompanying Notes to unaudited interim Consolidated Financial Statements are an integral part of these statements.

9

CITIZENS FINANCIAL GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	Three Months Ended March 31,
(in millions)	2016			2015
OPERATING ACTIVITIES
Net income		$223			$209
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses	91			58
Originations of mortgage loans held for sale	(484		)	(495		)
Proceeds from sales of mortgage loans held for sale	479			462
Purchases of commercial loans held for sale	(362		)	(288		)
Proceeds from sales of commercial loans held for sale	345			262
Amortization of terminated cash flow hedges	15			4
Depreciation, amortization and accretion	112			113
Mortgage servicing rights valuation charge-off (recovery)	5			(1		)
Securities impairment	1			1
Deferred income taxes	30			14
Share-based compensation	4			6
Gain on sales of:
Debt securities	(9		)	(8		)
Marketable equity securities available for sale	—			(2		)
Premises and equipment	(2		)	—
Increase in other assets	(339		)	(136		)
Increase (decrease) in other liabilities	265			(101		)
Net cash provided by operating activities	374			98
INVESTING ACTIVITIES
Investment securities:
Purchases of securities available for sale	(706		)	(2,190		)
Proceeds from maturities and paydowns of securities available for sale	709			865
Proceeds from sales of securities available for sale	217			1,101
Purchases of securities held to maturity	—			(181		)
Proceeds from maturities and paydowns of securities held to maturity	131			150
Purchases of other investment securities, at fair value	(51		)	—
Proceeds from sales of other investment securities, at fair value	53			—
Purchases of other investment securities, at cost	(37		)	(6		)
Proceeds from sales of other investment securities, at cost	4			11
Net increase in interest-bearing deposits in banks	(178		)	(245		)
Net increase in loans and leases	(2,401		)	(1,183		)
Net increase in bank-owned life insurance	(12		)	(8		)
Premises and equipment:
Purchases	(8		)	(18		)
Proceeds from sales	3			11
Capitalization of software	(45		)	(47		)
Net cash used in investing activities	(2,321		)	(1,740		)
FINANCING ACTIVITIES
Net increase in deposits	67			3,283
Net (decrease) increase in federal funds purchased and securities sold under agreements to repurchase	(88		)	145
Net increase in other short-term borrowed funds	670			—
Proceeds from issuance of long-term borrowed funds	750			—
Repayments of long-term borrowed funds (RBS balances of $125 and $0, respectively)	(629		)	(3		)
Dividends declared and paid to common stockholders	(53		)	(55		)
Net cash provided by financing activities	717			3,370
(Decrease) increase in cash and cash equivalents	(1,230		)	1,728
Cash and cash equivalents at beginning of period	3,085			3,276
Cash and cash equivalents at end of period		$1,855			$5,004

The accompanying Notes to unaudited interim Consolidated Financial Statements are an integral part of these statements.

10

CITIZENS FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1 - BASIS OF PRESENTATION

Basis of Presentation

The unaudited interim Consolidated Financial Statements, including the Notes thereto of Citizens Financial Group, Inc., have been prepared in accordance with GAAP interim reporting requirements, and therefore do not include all information and Notes included in the audited Consolidated Financial Statements in conformity with GAAP. These unaudited interim Consolidated Financial Statements and Notes thereto should be read in conjunction with the Company’s audited Consolidated Financial Statements and accompanying Notes included in the Company’s Form 10-K for the year ended December 31, 2015. The Company’s principal business activity is banking, conducted through its subsidiaries, Citizens Bank, N.A. and Citizens Bank of Pennsylvania.

The unaudited interim Consolidated Financial Statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods. The results for interim periods are not necessarily indicative of results for a full year.

Certain prior period amounts have been reclassified to conform to current period presentation. These reclassifications had no effect on net income, total comprehensive income, total assets or total stockholders’ equity as previously reported.

Recent Accounting Pronouncements

In April 2016, the FASB issued ASU No. 2016-10 “Identifying Performance Obligations and Licensing.” The ASU supplements the new revenue recognition standard issued in 2014 by clarifying the guidance related to licensing and the identification of performance obligations. The ASU is effective for the Company beginning on January 1, 2018. The Company is currently assessing the impact of this guidance on the Company’s unaudited interim Consolidated Financial Statements.

In March 2016, the FASB issued ASU No. 2016-09 “Improvements to Employee Share-Based Payment Accounting.” The ASU modifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The ASU is effective for the Company beginning on January 1, 2017. Adoption of this guidance is not expected to have a material impact on the Company’s unaudited interim Consolidated Financial Statements.

In March 2016, the FASB issued ASU No. 2016-08 “Principal versus Agent Considerations (Reporting Revenue Gross versus Net).” The ASU supplements the new revenue recognition standard issued in 2014 by clarifying the implementation guidance on principal versus agent considerations. The ASU is effective for the Company beginning on January 1, 2018. The Company is currently assessing the impact of this guidance on the Company’s unaudited interim Consolidated Financial Statements.

In March 2016, the FASB issued ASU No. 2016-05 “Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships.” The ASU clarifies that a change in a counterparty to a derivative instrument that has been designated as a hedging instrument, in and of itself, does not result in a hedge de-designation under ASC 815. The ASU is effective for the Company beginning on January 1, 2017. Adoption of this guidance is not expected to have a material impact on the Company’s unaudited interim Consolidated Financial Statements.

In February 2016, the FASB issued ASU 2016-02 “Leases.” The ASU generally requires lessees to recognize a right-of use asset and corresponding lease liability for all leases with a lease term of greater than one year. The ASU is effective for the Company beginning on January 1, 2019. The Company is currently assessing the impact of this guidance on the Company’s unaudited interim Consolidated Financial Statements.

In January 2016, the FASB issued ASU No. 2016-01 “Recognition and Measurement of Financial Assets and Financial Liabilities.” The ASU requires equity investments (except for those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in the fair value recognized through net income. The ASU also requires separate presentation of financial assets and financial liabilities by measurement category and form of financial assets on the balance sheet or the notes to the financial statements. In addition, the ASU makes several other targeted amendments to the existing accounting and disclosure requirements for financial instruments, including revised guidance related to valuation allowance assessments when recognizing deferred tax assets on unrealized losses on debt securities available for sale. The ASU is effective for the Company beginning on January 1, 2018. The Company is currently assessing the impact of this guidance on the Company’s unaudited interim Consolidated Financial Statements.

11

CITIZENS FINANCIAL GROUP, INC.

In February 2015, the FASB issued ASU No. 2015-02 “Consolidation (Topic 810): Amendments to the Consolidation Analysis.” This standard focuses on the consolidation evaluation for reporting organizations that are required to evaluate whether they should consolidate certain legal entities such as limited partnerships, limited liability corporations, and securitization structures (e.g., collateralized debt obligations, collateralized loan obligations, and mortgage-backed security transactions). This new standard simplifies consolidation accounting by reducing the number of consolidation models. The ASU was effective for the Company beginning on January 1, 2016. Adoption of this guidance did not have a material impact on the Company’s unaudited interim Consolidated Financial Statements.

NOTE 2 - SECURITIES

The following table provides the major components of securities at amortized cost and fair value:

	March 31, 2016									December 31, 2015
(in millions)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities Available for Sale
U.S. Treasury and other		$16		$—		$—			$16		$16		$—		$—			$16
State and political subdivisions	9		—		—			9		9		—		—			9
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	17,147		300		(13		)	17,434		17,234		153		(67		)	17,320
Other/non-agency	526		2		(40		)	488		555		4		(37		)	522
Total mortgage-backed securities	17,673		302		(53		)	17,922		17,789		157		(104		)	17,842
Total debt securities available for sale	17,698		302		(53		)	17,947		17,814		157		(104		)	17,867
Marketable equity securities	5		—		—			5		5		—		—			5
Other equity securities	12		—		—			12		12		—		—			12
Total equity securities available for sale	17		—		—			17		17		—		—			17
Total securities available for sale		$17,715		$302		($53	)		$17,964		$17,831		$157		($104	)		$17,884
Securities Held to Maturity
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities		$4,010		$93		$—			$4,103		$4,105		$27		($11	)		$4,121
Other/non-agency	1,119		39		—			1,158		1,153		23		—			1,176
Total securities held to maturity		$5,129		$132		$—			$5,261		$5,258		$50		($11	)		$5,297
Other Investment Securities, at Fair Value
Money market mutual fund		$63		$—		$—			$63		$65		$—		$—			$65
Other investments	5		—		—			5		5		—		—			5
Total other investment securities, at fair value		$68		$—		$—			$68		$70		$—		$—			$70
Other Investment Securities, at Cost
Federal Reserve Bank stock		$468		$—		$—			$468		$468		$—		$—			$468
Federal Home Loan Bank stock	428		—		—			428		395		—		—			395
Total other investment securities, at cost		$896		$—		$—			$896		$863		$—		$—			$863

12

CITIZENS FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The Company has reviewed its securities portfolio for other-than-temporary impairments. The following table presents the net securities impairment losses recognized in earnings:

	Three Months Ended  March 31
(in millions)	2016			2015
Other-than-temporary impairment:
Total other-than-temporary impairment losses		($41	)		($31	)
Portions of loss recognized in other comprehensive income (before taxes)	40			30
Net securities impairment losses recognized in earnings		($1	)		($1	)

The following tables summarize those securities whose fair values are below carrying values, segregated by those that have been in a continuous unrealized loss position for less than twelve months and those that have been in a continuous unrealized loss position for twelve months or longer:

	March 31, 2016
	Less than 12 Months						12 Months or Longer						Total
(dollars in millions)	Number of Issues	Fair Value		Gross Unrealized Losses			Number of Issues	Fair Value		Gross Unrealized Losses			Number of Issues	Fair Value		Gross Unrealized Losses
U.S. Treasury and other	1		$9		$—		—		$—		$—		1		$9		$—
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	15	614		(1		)	33	727		(12		)	48	1,341		(13		)
Other/non-agency	6	19		—			20	344		(40		)	26	363		(40		)
Total mortgage-backed securities	21	633		(1		)	53	1,071		(52		)	74	1,704		(53		)
Total	22		$642		($1	)	53		$1,071		($52	)	75		$1,713		($53	)

	December 31, 2015
	Less than 12 Months						12 Months or Longer						Total
(dollars in millions)	Number of Issues	Fair Value		Gross Unrealized Losses			Number of Issues	Fair Value		Gross Unrealized Losses			Number of Issues	Fair Value		Gross Unrealized Losses
State and political subdivisions	1		$9		$—		—		$—		$—		1		$9		$—
U.S. Treasury and other	1	15		—			—	—		—			1	15		—
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	162	7,423		(51		)	36	819		(27		)	198	8,242		(78		)
Other/non-agency	2	9		—			20	361		(37		)	22	370		(37		)
Total mortgage-backed securities	164	7,432		(51		)	56	1,180		(64		)	220	8,612		(115		)
Total	166		$7,456		($51	)	56		$1,180		($64	)	222		$8,636		($115	)

For each debt security identified with an unrealized loss, the Company reviews the expected cash flows to determine if the impairment in value is temporary or other-than-temporary. If the Company has determined that the present value of the debt security’s expected cash flows is less than its amortized cost basis, an other-than-temporary impairment is deemed to have occurred. The amount of impairment loss that is recognized in current period earnings is dependent on the Company’s intent to sell (or not sell) the debt security.

13

CITIZENS FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

If the Company intends to sell the impaired debt security, the impairment loss recognized in current period earnings equals the difference between the debt security’s fair value and its amortized cost. If the Company does not intend to sell the impaired debt security, and it is not likely that the Company will be required to sell the impaired security, the credit-related impairment loss is recognized in current period earnings and equals the difference between the amortized cost of the debt security and the present value of the expected cash flows that have currently been projected.

In addition to these cash flow projections, several other characteristics of each debt security are reviewed when determining whether a credit loss exists and the period over which the debt security is expected to recover. These characteristics include: (1) the type of investment, (2) various market factors affecting the fair value of the security (e.g., interest rates, spread levels, liquidity in the sector, etc.), (3) the length and severity of impairment, and (4) the public credit rating of the instrument.

The Company estimates the portion of loss attributable to credit using a cash flow model. The inputs to this model include prepayment, default and loss severity assumptions that are based on industry research and observed data. The loss projections generated by the model are reviewed on a quarterly basis by a cross-functional governance committee. This governance committee determines whether security impairments are other-than-temporary based on this review.

The following table presents the cumulative credit-related losses recognized in earnings on debt securities held by the Company:

	Three Months Ended March 31,
(in millions)	2016			2015
Cumulative balance at beginning of period		$66			$62
Credit impairments recognized in earnings on securities that have been previously impaired	1			1
Reductions due to increases in cash flow expectations on impaired securities	(1		)	(1		)
Cumulative balance at end of period		$66			$62

Cumulative credit losses recognized in earnings for impaired AFS debt securities held as of March 31, 2016 and 2015 were $66 million and $62 million, respectively. There were no credit losses recognized in earnings for the Company’s HTM portfolio as of March 31, 2016 and 2015. For the three months endedMarch 31, 2016 and 2015, the Company recognized credit related other-than-temporary impairment losses in earnings of $1 million related to non-agency MBS in the AFS portfolio. There were no credit impaired debt securities sold during the three months endedMarch 31, 2016 and 2015. Reductions in credit losses due to increases in cash flow expectations were $1 million for the three months endedMarch 31, 2016 and 2015, and were presented in interest income from investment securities on the Consolidated Statements of Operations. The Company does not currently have the intent to sell these debt securities, and it is not likely that the Company will be required to sell these debt securities prior to the recovery of their amortized cost bases.

The Company has determined that credit losses are not expected to be incurred on the remaining agency and non-agency MBS identified with unrealized losses as of the current reporting date. The unrealized losses on these debt securities reflect the reduced liquidity in the MBS market and the increased risk spreads due to the uncertainty of the U.S. macroeconomic environment. Therefore, the Company has determined that these debt securities are not other-than-temporarily impaired because the Company does not currently have the intent to sell these debt securities, and it is not likely that the Company will be required to sell these debt securities prior to the recovery of their amortized cost bases. Any subsequent increases in the valuation of impaired debt securities do not impact their recorded cost bases. Additionally, as of March 31, 2016 and 2015, $40 million and $30 million respectively, of pre-tax non-credit related losses were deferred in OCI.

14

CITIZENS FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The amortized cost and fair value of debt securities at March 31, 2016 by contractual maturity are shown below. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without incurring penalties.

	Distribution of Maturities
(in millions)	1 Year or Less		1-5 Years		5-10 Years		After 10 Years		Total
Amortized Cost:
Debt securities available for sale
U.S. Treasury and other		$15		$—		$1		$—		$16
State and political subdivisions	—		—		—		9		9
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	15		37		1,790		15,305		17,147
Other/non-agency	—		57		3		466		526
Total debt securities available for sale	30		94		1,794		15,780		17,698
Debt securities held to maturity
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	—		—		—		4,010		4,010
Other/non-agency	—		—		—		1,119		1,119
Total debt securities held to maturity	—		—		—		5,129		5,129
Total amortized cost of debt securities		$30		$94		$1,794		$20,909		$22,827
Fair Value:
Debt securities available for sale
U.S. Treasury and other		$15		$—		$1		$—		$16
State and political subdivisions	—		—		—		9		9
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	15		39		1,823		15,557		17,434
Other/non-agency	—		57		3		428		488
Total debt securities available for sale	30		96		1,827		15,994		17,947
Debt securities held to maturity
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	—		—		—		4,103		4,103
Other/non-agency	—		—		—		1,158		1,158
Total debt securities held to maturity	—		—		—		5,261		5,261
Total fair value of debt securities		$30		$96		$1,827		$21,255		$23,208

The following table reports the amounts recognized in interest income from investment securities on the Consolidated Statements of Operations:

	Three Months Ended March 31,
(in millions)	2016		2015
Taxable		$145		$159
Non-taxable	—		—
Total interest income from investment securities and interest-bearing deposits in banks		$145		$159

15

CITIZENS FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Realized gains and losses on securities are shown below:

	Three Months Ended March 31,
(in millions)	2016		2015
Gains on sale of debt securities		$9		$12
Losses on sale of debt securities	—		(4		)
Debt securities gains, net		$9		$8
Equity securities gains		$—		$2

The amortized cost and fair value of securities pledged are shown below:

	March 31, 2016				December 31, 2015
(in millions)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Pledged against repurchase agreements		$682		$695		$805		$808
Pledged against FHLB borrowed funds	1,129		1,168		1,163		1,186
Pledged against derivatives, to qualify for fiduciary powers, and to secure public and other deposits as required by law	3,336		3,406		3,579		3,610

The Company regularly enters into security repurchase agreements with unrelated counterparties. Repurchase agreements are financial transactions that involve the transfer of a security from one party to another and a subsequent transfer of the same (or “substantially the same”) security back to the original party. The Company’s repurchase agreements are typically short-term transactions, but they may be extended to longer terms to maturity. Such transactions are accounted for as secured borrowed funds on the Company’s financial statements. When permitted by GAAP, the Company offsets the short-term receivables associated with its reverse repurchase agreements with the short-term payables associated with its repurchase agreements.

The effects of this offsetting on the Consolidated Balance Sheets are presented in the following table:

	March 31, 2016						December 31, 2015
(in millions)	Gross Assets (Liabilities)		Gross Assets (Liabilities) Offset		Net Amounts of Assets (Liabilities)		Gross Assets (Liabilities)			Gross Assets (Liabilities) Offset			Net Amounts of Assets (Liabilities)
Securities purchased under agreements to resell		$—		$—		$—		$500			($500	)		$—
Securities sold under agreements to repurchase	—		—		—		(500		)	500			—

Note: The Company also offsets certain derivative assets and derivative liabilities on the Consolidated Balance Sheets. For further information see Note 11 “Derivatives.”

There were no securitizations of mortgage loans retained in the investment portfolio for the three months ended March 31, 2016 and there were $18 million of securitizations of mortgage loans for the three months ended March 31, 2015. These securitizations included a substantive guarantee by a third party. In 2015, the guarantor was Freddie Mac. These securitizations were accounted for as a sale of the transferred loans and as a purchase of securities. The securities received from the guarantors are classified as AFS.

16

CITIZENS FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 3 - LOANS AND LEASES

A summary of the loans and leases portfolio follows:

(in millions)	March 31, 2016		December 31, 2015
Commercial		$34,671		$33,264
Commercial real estate	9,406		8,971
Leases	3,895		3,979
Total commercial	47,972		46,214
Residential mortgages	13,345		13,318
Home equity loans	2,313		2,557
Home equity lines of credit	14,526		14,674
Home equity loans serviced by others (1)	930		986
Home equity lines of credit serviced by others (1)	339		389
Automobile	13,847		13,828
Student	5,006		4,359
Credit cards	1,581		1,634
Other retail	1,132		1,083
Total retail	53,019		52,828
Total loans and leases (2) (3)		$100,991		$99,042

⁽¹⁾ The Company’s SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

⁽²⁾ Excluded from the table above are loans held for sale totaling $751 million and $365 million as of March 31, 2016 and December 31, 2015, respectively.

⁽³⁾ Mortgage loans serviced for others by the Company’s subsidiaries are not included above and amounted to $17.4 billion and $17.6 billion at March 31, 2016 and December 31, 2015, respectively.

Loans held for sale at fair value totaled $365 million and $325 million at March 31, 2016 and December 31, 2015, respectively, and consisted of residential mortgages originated for sale of $292 million and the commercial trading portfolio of $73 million as of March 31, 2016. As of December 31, 2015, residential mortgages originated for sale were $268 million and the commercial trading portfolio totaled $57 million.

Other loans held for sale, at lower of cost or market value, totaled $386 million and $40 million as of March 31, 2016 and December 31, 2015, respectively. On March 31, 2016, the Company transferred $373 million of TDRs to other loans held for sale, including $288 million of residential mortgages and $85 million of home equity loans. Other loans held for sale also included commercial loans associated with the Company’s syndications business of $13 million as of March 31, 2016 compared with $40 million as of December 31, 2015. The December 31, 2015 balance consisted entirely of commercial loan syndications.

Loans pledged as collateral for FHLB borrowed funds totaled $23.7 billion and $23.2 billion at March 31, 2016 and December 31, 2015, respectively. This collateral consists primarily of residential mortgages and home equity loans. Loans pledged as collateral to support the contingent ability to borrow at the FRB discount window, if necessary, totaled $15.6 billion and $15.9 billion at March 31, 2016 and December 31, 2015, respectively.

During the three months endedMarch 31, 2016, the Company purchased $134 million of automobile loans, $120 million of residential mortgages, and $369 million of student loans. During the three months endedMarch 31, 2015, the Company purchased $249 million of residential loans, $393 million of automobile loans, and $261 million of student loans.

During the three months endedMarch 31, 2016, the Company sold $73 million of commercial loans and $173 million of residential mortgage loans. During the three months endedMarch 31, 2015, the Company sold $273 million of residential mortgage loans and $111 million of commercial loans.     

17

CITIZENS FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 4 - ALLOWANCE FOR CREDIT LOSSES, NONPERFORMING ASSETS, AND CONCENTRATIONS OF CREDIT RISK

The allowance for credit losses consists of the ALLL and the reserve for unfunded commitments. It is increased through a provision for credit losses that is charged to earnings, based on the Company’s quarterly evaluation of the loan portfolio, and is reduced by net charge-offs and the ALLL associated with sold loans. See Note 1 “Significant Accounting Policies” to the Company’s audited Consolidated Financial Statements in the Annual Report on Form 10-K for the year ended December 31, 2015, for a detailed discussion of ALLL reserve methodologies and estimation techniques.

On a quarterly basis, the Company reviews and refines its estimate of the allowance for credit losses, taking into consideration changes in portfolio size and composition, historical loss experience, internal risk ratings, current economic conditions, industry performance trends and other pertinent information.

There were no material changes in assumptions or estimation techniques compared with prior periods that impacted the determination of the current period’s ALLL and the reserve for unfunded lending commitments.

The following is a summary of changes in the allowance for credit losses:

	Three Months Ended March 31, 2016
(in millions)	Commercial			Retail			Total
Allowance for loan and lease losses as of January 1, 2016		$596			$620			$1,216
Charge-offs	(13		)	(113		)	(126		)
Recoveries	4			39			43
Net charge-offs	(9		)	(74		)	(83		)
Provision charged to income	46			45			91
Allowance for loan and lease losses as of March 31, 2016	633			591			1,224
Reserve for unfunded lending commitments as of January 1, 2016	58			—			58
Credit for unfunded lending commitments	—			—			—
Reserve for unfunded lending commitments as of March 31, 2016	58			—			58
Total allowance for credit losses as of March 31, 2016		$691			$591			$1,282

	Three Months Ended March 31, 2015
(in millions)	Commercial			Retail			Total
Allowance for loan and lease losses as of January 1, 2015		$544			$651			$1,195
Charge-offs	(6		)	(109		)	(115		)
Recoveries	28			33			61
Net recoveries (charge-offs)	22			(76		)	(54		)
Sales/Other	—			(2		)	(2		)
Provision charged to income	12			51			63
Allowance for loan and lease losses as of March 31, 2015	578			624			1,202
Reserve for unfunded lending commitments as of January 1, 2015	61			—			61
Provision for unfunded lending commitments	(5		)	—			(5		)
Reserve for unfunded lending commitments as of March 31, 2015	56			—			56
Total allowance for credit losses as of March 31, 2015		$634			$624			$1,258

18

CITIZENS FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The recorded investment in loans and leases based on the Company’s evaluation methodology is as follows:

	March 31, 2016						December 31, 2015
(in millions)	Commercial		Retail		Total		Commercial		Retail		Total
Individually evaluated		$439		$775		$1,214		$218		$1,165		$1,383
Formula-based evaluation	47,533		52,244		99,777		45,996		51,663		97,659
Total		$47,972		$53,019		$100,991		$46,214		$52,828		$99,042

The following is a summary of the allowance for credit losses by evaluation method:

	March 31, 2016						December 31, 2015
(in millions)	Commercial		Retail		Total		Commercial		Retail		Total
Individually evaluated		$42		$82		$124		$36		$101		$137
Formula-based evaluation	649		509		1,158		618		519		1,137
Allowance for credit losses		$691		$591		$1,282		$654		$620		$1,274

For commercial loans and leases, the Company utilizes regulatory classification ratings to monitor credit quality. Loans with a “pass” rating are those that the Company believes will be fully repaid in accordance with the contractual loan terms. Commercial loans and leases that are “criticized” are those that have some weakness that indicates an increased probability of future loss. For retail loans, the Company primarily uses the loan’s payment and delinquency status to monitor credit quality. The further a loan is past due, the greater the likelihood of future credit loss. These credit quality indicators for both commercial and retail loans are continually updated and monitored.

The recorded investment in classes of commercial loans and leases based on regulatory classification ratings is as follows:

	March 31, 2016
			Criticized
(in millions)	Pass		Special Mention		Substandard		Doubtful		Total
Commercial		$32,567		$928		$1,086		$90		$34,671
Commercial real estate	8,864		272		184		86		9,406
Leases	3,767		72		56		—		3,895
Total		$45,198		$1,272		$1,326		$176		$47,972

	December 31, 2015
			Criticized
(in millions)	Pass		Special Mention		Substandard		Doubtful		Total
Commercial		$31,276		$911		$1,002		$75		$33,264
Commercial real estate	8,450		272		171		78		8,971
Leases	3,880		55		44		—		3,979
Total		$43,606		$1,238		$1,217		$153		$46,214

19

CITIZENS FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The recorded investment in classes of retail loans, categorized by delinquency status is as follows:

	March 31, 2016
(in millions)	Current		1-29 Days Past Due		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total
Residential mortgages		$13,058		$77		$52		$7		$151		$13,345
Home equity loans	2,055		147		26		5		80		2,313
Home equity lines of credit	13,870		380		53		17		206		14,526
Home equity loans serviced by others (1)	840		55		14		1		20		930
Home equity lines of credit serviced by others (1)	250		40		9		5		35		339
Automobile	12,827		860		104		20		36		13,847
Student	4,848		87		17		9		45		5,006
Credit cards	1,511		37		10		7		16		1,581
Other retail	1,069		49		9		2		3		1,132
Total		$50,328		$1,732		$294		$73		$592		$53,019

⁽¹⁾ The Company’s SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

	December 31, 2015
(in millions)	Current		1-29 Days Past Due		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total
Residential mortgages		$12,905		$97		$54		$16		$246		$13,318
Home equity loans	2,245		164		32		12		104		2,557
Home equity lines of credit	13,982		407		60		20		205		14,674
Home equity loans serviced by others (1)	886		60		14		6		20		986
Home equity lines of credit serviced by others (1)	296		48		10		6		29		389
Automobile	12,670		964		127		32		35		13,828
Student	4,175		113		19		11		41		4,359
Credit cards	1,554		44		11		9		16		1,634
Other retail	1,013		53		8		4		5		1,083
Total		$49,726		$1,950		$335		$116		$701		$52,828

⁽¹⁾ The Company’s SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

20

CITIZENS FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Nonperforming Assets

The following table presents nonperforming loans and leases and loans accruing 90 days or more past due:

	Nonperforming (1)				Accruing and 90 days or more past due
(in millions)	March 31, 2016		December 31, 2015		March 31, 2016		December 31, 2015
Commercial		$284		$71		$2		$1
Commercial real estate	86		77		2		—
Leases	—		—		—		—
Total commercial	370		148		4		1
Residential mortgages (2) (3) (4)	174		331		22		—
Home equity loans (2)	99		135		—		—
Home equity lines of credit	261		272		—		—
Home equity loans serviced by others (5)	37		38		—		—
Home equity lines of credit serviced by others (5)	38		32		—		—
Automobile	42		42		—		—
Student	40		41		5		6
Credit card	16		16		—		—
Other retail	2		5		1		2
Total retail	709		912		28		8
Total		$1,079		$1,060		$32		$9

⁽¹⁾ Effective March 31, 2016, the Company began excluding loans 90 days or more past due and still accruing, which includes loans guaranteed by government-sponsored entities, from nonperforming loans and leases. Nonperforming loans and leases as of December 31, 2015 included loans and leases on nonaccrual of $1.051 billion and loans and leases accruing and 90 days or more past due of $9 million.

⁽²⁾$97 million of previously nonperforming troubled debt restructured loans were transferred from loans and leases to other loans held for sale on March 31, 2016, including $66 million of residential mortgages and $31 million of home equity loans.     

⁽³⁾ Effective March 31, 2016, the Company began excluding first lien residential mortgage loans that are 100% guaranteed by the Federal Housing Administration from nonperforming balances; $22 million of these loans are presented above as accruing and 90 days or more past due.

⁽⁴⁾ Effective March 31, 2016, the Company began excluding guaranteed residential mortgage loans sold to GNMA for which the Company had the right but not the obligation to repurchase from nonperforming balances; these totaled $37 million; these loans are consolidated on the Company’s Consolidated Balance Sheets.

⁽⁵⁾ The Company's SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

A summary of other nonperforming assets is as follows:

(in millions)	March 31, 2016		December 31, 2015
Other nonperforming assets, net of valuation allowance:
Commercial		$1		$1
Retail	47		45
Other nonperforming assets, net of valuation allowance		$48		$46

Other nonperforming assets consist primarily of other real estate owned and are presented in other assets on the Consolidated Balance Sheets.

21

CITIZENS FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

A summary of key performance indicators is as follows:

	March 31, 2016		December 31, 2015
Nonperforming commercial loans and leases as a percentage of total loans and leases (1)	0.37	%	0.15	%
Nonperforming retail loans as a percentage of total loans and leases (1)	0.70		0.92
Total nonperforming loans and leases as a percentage of total loans and leases (1)	1.07	%	1.07	%
Nonperforming commercial assets as a percentage of total assets (1)	0.26	%	0.11	%
Nonperforming retail assets as a percentage of total assets (1)	0.54		0.69
Total nonperforming assets as a percentage of total assets (1)	0.80	%	0.80	%

⁽¹⁾ December 31, 2015 ratios included loans accruing and 90 days or more past due of $1 million and $8 million for commercial and retail, respectively.

The recorded investment in mortgage loans collateralized by residential real estate property for which formal foreclosure proceedings are in process was $216 million and $257 million as of March 31, 2016 and December 31, 2015, respectively.

The following is an analysis of the age of the past due amounts (accruing and nonaccruing):

	March 31, 2016								December 31, 2015
(in millions)	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due
Commercial		$13		$7		$287		$307		$9		$4		$71		$84
Commercial real estate	40		—		88		128		30		3		77		110
Leases	15		—		—		15		9		1		—		10
Total commercial	68		7		375		450		48		8		148		204
Residential mortgages	52		7		151		210		54		16		246		316
Home equity loans	26		5		80		111		32		12		104		148
Home equity lines of credit	53		17		206		276		60		20		205		285
Home equity loans serviced by others (1)	14		1		20		35		14		6		20		40
Home equity lines of credit serviced by others (1)	9		5		35		49		10		6		29		45
Automobile	104		20		36		160		127		32		35		194
Student	17		9		45		71		19		11		41		71
Credit cards	10		7		16		33		11		9		16		36
Other retail	9		2		3		14		8		4		5		17
Total retail	294		73		592		959		335		116		701		1,152
Total		$362		$80		$967		$1,409		$383		$124		$849		$1,356

⁽¹⁾ The Company’s SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

22

CITIZENS FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Impaired loans include: (1) nonaccruing larger balance commercial loans (greater than $3 million carrying value); and (2) commercial and retail TDRs (excluding loans held for sale). The following is a summary of impaired loan information by class:

	March 31, 2016
(in millions)	Impaired Loans With a Related Allowance		Allowance on Impaired Loans		Impaired Loans Without a Related Allowance		Unpaid Contractual Balance		Total Recorded Investment in Impaired Loans
Commercial		$163		$30		$208		$414		$371
Commercial real estate	56		12		12		69		68
Total commercial	219		42		220		483		439
Residential mortgages (1)	35		4		111		183		146
Home equity loans (1)	55		6		84		165		139
Home equity lines of credit	25		3		165		227		190
Home equity loans serviced by others (2)	48		7		22		84		70
Home equity lines of credit serviced by others (2)	3		—		7		14		10
Automobile	3		—		11		19		14
Student	163		47		1		164		164
Credit cards	27		11		—		27		27
Other retail	13		4		2		17		15
Total retail	372		82		403		900		775
Total		$591		$124		$623		$1,383		$1,214

⁽¹⁾ Excluded from the table above are retail TDR principal balances held for sale with a total recorded investment of $373 million, including residential mortgages of $288 million and home equity loans of $85 million.

⁽²⁾ The Company’s SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

	December 31, 2015
(in millions)	Impaired Loans With a Related Allowance		Allowance on Impaired Loans		Impaired Loans Without a Related Allowance		Unpaid Contractual Balance		Total Recorded Investment in Impaired Loans
Commercial		$92		$23		$58		$144		$150
Commercial real estate	56		13		12		70		68
Total commercial	148		36		70		214		218
Residential mortgages	121		16		320		608		441
Home equity loans	85		11		139		283		224
Home equity lines of credit	27		2		167		234		194
Home equity loans serviced by others (1)	50		8		24		88		74
Home equity lines of credit serviced by others (1)	3		1		7		14		10
Automobile	3		—		11		19		14
Student	163		48		2		165		165
Credit cards	28		11		—		28		28
Other retail	13		4		2		18		15
Total retail	493		101		672		1,457		1,165
Total		$641		$137		$742		$1,671		$1,383

⁽¹⁾ The Company’s SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

23

CITIZENS FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Additional information on impaired loans is as follows:

	Three Months Ended March 31,
	2016				2015
(in millions)	Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment
Commercial		$1		$201		$1		$142
Commercial real estate	—		66		—		51
Total commercial	1		267		1		193
Residential mortgages	1		142		4		441
Home equity loans	2		134		2		268
Home equity lines of credit	1		187		1		156
Home equity loans serviced by others (1)	1		71		1		88
Home equity lines of credit serviced by others (1)	—		10		—		11
Automobile	—		13		—		11
Student	2		163		2		164
Credit cards	—		27		1		30
Other retail	—		14		—		19
Total retail	7		761		11		1,188
Total		$8		$1,028		$12		$1,381

⁽¹⁾ The Company’s SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

Troubled Debt Restructurings

A loan modification is identified as a TDR when the Company or a bankruptcy court grants the borrower a concession the Company would not otherwise make in response to the borrower’s financial difficulties. TDRs typically result from the Company’s loss mitigation efforts and are undertaken in order to improve the likelihood of recovery and continuity of the relationship. The Company’s loan modifications are handled on a case-by-case basis and are negotiated to achieve mutually agreeable terms that maximize loan collectability and meet the borrower’s financial needs. Concessions granted in TDRs for all classes of loans may include lowering the interest rate, forgiving a portion of principal, extending the loan term, lowering scheduled payments for a specified period of time, principal forbearance, or capitalizing past due amounts. A rate increase can be a concession if the increased rate is lower than a market rate for debt with risk similar to that of the restructured loan. TDRs for commercial loans and leases may also involve creating a multiple note structure, accepting non-cash assets, accepting an equity interest, or receiving a performance-based fee. In some cases, a TDR may involve multiple concessions. The financial effects of TDRs for all loan classes may include lower income (either due to a lower interest rate or a delay in the timing of cash flows), larger loan loss provisions, and accelerated charge-offs if the modification renders the loan collateral-dependent. In some cases, interest income throughout the term of the loan may increase if, for example, the loan is extended or the interest rate is increased as a result of the restructuring.

Because TDRs are impaired loans, the Company measures impairment by comparing the present value of expected future cash flows, or when appropriate, the fair value of collateral, to the loan’s recorded investment. Any excess of recorded investment over the present value of expected future cash flows or collateral value is recognized by creating a valuation allowance or increasing an existing valuation allowance. Any portion of the loan’s recorded investment the Company does not expect to collect as a result of the modification is charged off at the time of modification.

Commercial TDRs were $143 million and $155 million on March 31, 2016 and December 31, 2015, respectively. Retail TDRs totaled $775 million and $1.2 billion on March 31, 2016 and December 31, 2015, respectively. On March 31, 2016, $373 million of TDRs were transferred to other loans held for sale including $288 million of residential mortgages and $85 million of home equity loans. Commitments to lend additional funds to debtors owing receivables which were TDRs were $28 million and $15 million on March 31, 2016 and December 31, 2015, respectively.

24

CITIZENS FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following table summarizes how loans were modified during the three months endedMarch 31, 2016, the charge-offs related to the modifications, and the impact on the ALLL. The reported balances include loans that became TDRs during 2016 and were paid off in full, charged off, or sold prior to March 31, 2016.

	Primary Modification Types
	Interest Rate Reduction (1)					Maturity Extension (2)
(dollars in millions)	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial	5		$1		$1	26		$4		$4
Commercial real estate	—	—		—		—	—		—
Total commercial	5	1		1		26	4		4
Residential mortgages	22	3		3		6	1		1
Home equity loans	14	1		1		16	2		2
Home equity lines of credit	7	1		1		19	2		2
Home equity loans serviced by others (3)	3	—		—		—	—		—
Home equity lines of credit serviced by others (3)	—	—		—		1	—		—
Automobile	21	1		1		5	—		—
Student	—	—		—		—	—		—
Credit cards	529	3		3		—	—		—
Other retail	—	—		—		—	—		—
Total retail	596	9		9		47	5		5
Total	601		$10		$10	73		$9		$9

	Primary Modification Types
	Other (4)
(dollars in millions)	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Net Change to ALLL Resulting from Modification			Charge-offs Resulting from Modification
Commercial	5		$21		$20		($1	)		$18
Commercial real estate	—	—		—		—			—
Total commercial	5	21		20		(1		)	18
Residential mortgages	64	8		8		—			—
Home equity loans	87	6		6		—			—
Home equity lines of credit	32	2		2		—			—
Home equity loans serviced by others (3)	18	1		1		—			—
Home equity lines of credit serviced by others (3)	8	—		—		—			—
Automobile	191	3		3		—			—
Student	186	4		4		1			—
Credit cards	—	—		—		—			—
Other retail	3	—		—		—			—
Total retail	589	24		24		1			—
Total	594		$45		$44		$—			$18

⁽¹⁾ Includes modifications that consist of multiple concessions, one of which is an interest rate reduction.

⁽²⁾ Includes modifications that consist of multiple concessions, one of which is a maturity extension (unless one of the other concessions was an interest rate reduction).

⁽³⁾ The Company’s SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

⁽⁴⁾ Includes modifications other than interest rate reductions or maturity extensions, such as lowering scheduled payments for a specified period of time, principal forbearance, capitalizing arrearages, and principal forgiveness. Also included are the following: deferrals, trial modifications, certain bankruptcies, loans in forbearance and prepayment plans. Modifications can include the deferral of accrued interest resulting in post modification balances being higher than pre-modification.

25

CITIZENS FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following table summarizes how loans were modified during the three months endedMarch 31, 2015, the charge-offs related to the modifications, and the impact on the ALLL. The reported balances include loans that became TDRs during 2015 and were paid off in full, charged off, or sold prior to March 31, 2015.

	Primary Modification Types
	Interest Rate Reduction (1)					Maturity Extension (2)
(dollars in millions)	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial	6		$1		$1	28		$10		$10
Commercial real estate	1	—		—		—	—		—
Total commercial	7	1		1		28	10		10
Residential mortgages	33	6		6		10	2		2
Home equity loans	21	1		1		37	5		5
Home equity lines of credit	—	—		—		3	—		—
Home equity loans serviced by others (3)	17	1		1		—	—		—
Automobile	20	1		1		1	—		—
Credit cards	604	3		3		—	—		—
Total retail	695	12		12		51	7		7
Total	702		$13		$13	79		$17		$17

	Primary Modification Types
	Other (4)
(dollars in millions)	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Net Change to ALLL Resulting from Modification			Charge-offs Resulting from Modification
Commercial	1		$2		$2		($1	)		$—
Commercial real estate	1	4		4		—			—
Total commercial	2	6		6		(1		)	—
Residential mortgages	64	6		6		(1		)	—
Home equity loans	197	10		10		—			—
Home equity lines of credit	135	8		7		—			1
Home equity loans serviced by others (3)	46	2		2		—			1
Home equity lines of credit serviced by others (3)	7	—		—		—			—
Automobile	297	5		4		—			1
Student	381	8		7		2			—
Other retail	11	—		—		—			—
Total retail	1,138	39		36		1			3
Total	1,140		$45		$42		$—			$3

⁽¹⁾ Includes modifications that consist of multiple concessions, one of which is an interest rate reduction.

⁽²⁾ Includes modifications that consist of multiple concessions, one of which is a maturity extension (unless one of the other concessions was an interest rate reduction).

⁽³⁾ The Company’s SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

⁽⁴⁾ Includes modifications other than interest rate reductions or maturity extensions, such as lowering scheduled payments for a specified period of time, principal forbearance, capitalizing arrearages, and principal forgiveness. Also included are the following: deferrals, trial modifications, certain bankruptcies, loans in forbearance and prepayment plans. Modifications can include the deferral of accrued interest resulting in post modification balances being higher than pre-modification.

26

CITIZENS FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The table below summarizes TDRs that defaulted during the three months endedMarch 31, 2016 and 2015 within 12 months of their modification date. For purposes of this table, a payment default is defined as being past due 90 days or more under the modified terms. Amounts represent the loan’s recorded investment at the time of payment default. Loan data includes loans meeting the criteria that were paid off in full, charged off, or sold prior to March 31, 2016 and 2015. If a TDR of any loan type becomes 90 days past due after being modified, the loan is written down to the fair value of collateral less cost to sell. The amount written off is charged to the ALLL.

	Three Months Ended March 31,
	2016			2015
(dollars in millions)	Number of Contracts	Balance Defaulted		Number of Contracts	Balance Defaulted
Commercial	3		$—	6		$—
Commercial real estate	—	—		—	—
Total commercial	3	—		6	—
Residential mortgages	54	8		49	7
Home equity loans	49	3		51	3
Home equity lines of credit	25	3		40	2
Home equity loans serviced by others (1)	10	1		16	—
Home equity lines of credit serviced by others (1)	5	—		1	—
Automobile	15	—		23	—
Student	13	—		65	2
Credit cards	121	1		102	1
Other retail	—	—		2	—
Total retail	292	16		349	15
Total	295		$16	355		$15

⁽¹⁾ The Company’s SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

Concentrations of Credit Risk

Most of the Company’s business activity is with customers located in the New England, Mid-Atlantic and Midwest regions. Generally, loans are collateralized by assets including real estate, inventory, accounts receivable, other personal property and investment securities. As of March 31, 2016 and December 31, 2015, the Company had a significant amount of loans collateralized by residential and commercial real estate. There are no significant concentrations within the commercial loan or retail loan portfolios. Exposure to credit losses arising from lending transactions may fluctuate with fair values of collateral supporting loans, which may not perform according to contractual agreements. The Company’s policy is to collateralize loans to the extent necessary; however, unsecured loans are also granted on the basis of the financial strength of the applicant and the facts surrounding the transaction.

Certain loan products, including residential mortgages, home equity loans and lines of credit, and credit cards, have contractual features that may increase credit exposure to the Company in the event of an increase in interest rates or a decline in housing values. These products include loans that exceed 90% of the value of the underlying collateral (high LTV loans), interest-only and negative amortization residential mortgages, and loans with low introductory rates. Certain loans have more than one of these characteristics.

27

CITIZENS FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following table presents balances of loans with these characteristics:

	March 31, 2016
(in millions)	Residential Mortgages		Home Equity Loans and Lines of Credit		Home Equity Products Serviced by Others		Credit Cards		Student		Total
High loan-to-value		$519		$815		$695		$—		$—		$2,029
Interest only/negative amortization	1,181		—		—		—		1		1,182
Low introductory rate	—		—		—		93		—		93
Multiple characteristics and other	4		—		—		—		—		4
Total		$1,704		$815		$695		$93		$1		$3,308

	December 31, 2015
(in millions)	Residential Mortgages		Home Equity Loans and Lines of Credit		Home Equity Products Serviced by Others		Credit Cards		Student		Total
High loan-to-value		$649		$1,038		$785		$—		$—		$2,472
Interest only/negative amortization	1,110		—		—		—		—		1,110
Low introductory rate	—		3		—		96		—		99
Multiple characteristics and other	14		—		—		—		—		14
Total		$1,773		$1,041		$785		$96		$—		$3,695

NOTE 5 - VARIABLE INTEREST ENTITIES

The Company makes equity investments in various entities that are considered VIEs, as defined by GAAP. These investments primarily include ownership interests in limited partnerships that sponsor affordable housing projects and ownership interests in limited liability companies that sponsor renewable energy projects. A summary of these investments is as follows:

(in millions)	March 31, 2016		December 31, 2015
LIHTC investment included in other assets		$642		$598
LIHTC unfunded commitments included in other liabilities	377		365
Renewable energy investments included in other assets	118		118

Low Income Housing Tax Credit Partnerships

The purpose of the Company’s equity investments is to assist in achieving goals of the Community Reinvestment Act and to earn an adequate return of capital. The LIHTC partnerships are managed by general partners that have the power to direct the activities which most significantly affect the performance of the partnerships. The Company is therefore not the primary beneficiary of any LIHTC partnerships. Accordingly, the Company does not consolidate these VIEs and accounts for these investments in other assets on the Consolidated Balance Sheets.

The Company applies the proportional amortization method to account for its LIHTC investments. Under the proportional amortization method, the initial investment is amortized in proportion to the actual tax credits and other tax benefits to be received in the current period as compared to the total tax credits and other tax benefits expected to be received over the life of the investment. The amortization and tax benefits are included as a component of income tax expense. The Company reports its equity share of affordable housing partnership gains and losses as an adjustment to non-interest income. The Company reports its commitments to make future investments in other liabilities on the Consolidated Balance Sheets. The Company also receives tax credits, which are reported as a reduction of income tax expense (or increase to income tax benefit) related to these transactions.

    For the three months endedMarch 31, 2016, the Company recognized $15 million of amortization expense, $15 million of tax credits and $6 million of other tax benefits associated with these investments in the provision for income taxes. For the three months endedMarch 31, 2015, the Company recognized $12 million of amortization expense, $11 million of tax credits and $4

28

CITIZENS FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

million of other tax benefits associated with these investments in the provision for income taxes. No LIHTC investment impairment losses were recognized during the three months endedMarch 31, 2016 and 2015, respectively.

Renewable Energy Entities

The Company’s investments in renewable energy entities provide benefits from a return generated by government incentives plus other tax attributes that are associated with tax ownership (e.g., tax depreciation). As a tax equity investor, the Company does not have the power to direct the activities which most significantly affect the performance of these entities and therefore is not the primary beneficiary of any renewable energy entities. Accordingly, the Company does not consolidate these VIEs.

NOTE 6 - MORTGAGE BANKING

In its mortgage banking business, the Company sells residential mortgages to government-sponsored entities and other parties, who may issue securities backed by pools of such loans. The Company retains no beneficial interests in these sales, but may retain the servicing rights of the loans sold. The Company is obligated to subsequently repurchase a loan if the purchaser discovers a standard representation or warranty violation such as noncompliance with eligibility requirements, customer fraud, or servicing violations. This primarily occurs during a loan file review.

The Company received $479 million and $747 million of proceeds from the sale of residential mortgages for the three months endedMarch 31, 2016 and 2015, respectively, and recognized gains on such sales of $14 million and $21 million for the three months endedMarch 31, 2016 and 2015, respectively. Pursuant to the standard representations and warranties obligations discussed in the preceding paragraph, the Company repurchased residential mortgage loans totaling $2 million and $4 million for the three months endedMarch 31, 2016, and 2015, respectively.

Mortgage servicing fees, a component of mortgage banking income, were $13 million and $14 million for the three months endedMarch 31, 2016 and 2015, respectively. The Company recorded valuation charge-offs of $5 million and recoveries of $1 million for its MSRs for the three months endedMarch 31, 2016 and 2015, respectively.

Changes related to MSRs were as follows:

	As of and for the Three Months Ended March 31,
(in millions)	2016			2015
MSRs:
Balance as of January 1		$173			$184
Amount capitalized	5			6
Amortization	(9		)	(10		)
Carrying amount before valuation allowance	169			180
Valuation allowance for servicing assets:
Balance as of January 1	9			18
Valuation charge-offs (recoveries)	5			(1		)
Balance at end of period	14			17
Net carrying value of MSRs		$155			$163

MSRs are presented in other assets on the Consolidated Balance Sheets.

The fair value of MSRs is estimated using a valuation model that calculates the present value of estimated future net servicing cash flows, taking into consideration actual and expected mortgage loan prepayment rates, discount rates, contractual servicing fee income, servicing costs, default rates, ancillary income, and other economic factors, which are determined based on current market conditions. The valuation model uses a static discounted cash flow methodology incorporating current market interest rates. A static model does not attempt to forecast or predict the future direction of interest rates; rather it estimates the amount and timing of future servicing cash flows using current market interest rates. The current mortgage interest rate influences the expected prepayment rate and therefore, the length of the cash flows associated with the servicing asset, while the discount rate determines the present value of those cash flows. Expected mortgage loan prepayment assumptions are obtained using the QRM Multi Component prepayment model. The Company periodically obtains third-party valuations of its MSRs to assess the reasonableness of the fair value calculated by the valuation model.

29

CITIZENS FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The key economic assumptions used to estimate the value of MSRs are presented in the following table:

(dollars in millions)	March 31, 2016	December 31, 2015
Fair value	$168	$178
Weighted average life (in years)	4.9	5.4
Weighted average constant prepayment rate	13.3%	11.6%
Weighted average discount rate	9.7%	9.7%

The key economic assumptions used in estimating the fair value of MSRs capitalized during the period were as follows:

	Three Months Ended March 31,
	2016	2015
Weighted average life (in years)	6.1	4.7
Weighted average constant prepayment rate	11.0%	12.2%
Weighted average discount rate	9.8%	9.6%

The sensitivity analysis below as of March 31, 2016 and December 31, 2015 presents the impact to current fair value of an immediate 50 basis points and 100 basis points adverse change in the key economic assumptions and presents the decline in fair value that would occur if the adverse change were realized. These sensitivities are hypothetical. The effect of a variation in a particular assumption on the fair value of the mortgage servicing rights is calculated independently without changing any other assumption. In reality, changes in one factor may result in changes in another (e.g., changes in interest rates, which drive changes in prepayment speeds, could result in changes in the discount rates), which might amplify or counteract the sensitivities. The primary risk inherent in the Company’s MSRs is an increase in prepayments of the underlying mortgage loans serviced, which is dependent upon market movements of interest rates.

(in millions)	March 31, 2016		December 31, 2015
Prepayment rate:
Decline in fair value from a 50 basis point decrease in interest rates		$6		$5
Decline in fair value from a 100 basis point decrease in interest rates		$14		$11
Weighted average discount rate:
Decline in fair value from a 50 basis point increase in weighted average discount rate		$3		$3
Decline in fair value from a 100 basis point increase in weighted average discount rate		$5		$6

30

CITIZENS FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 7 - BORROWED FUNDS

The following is a summary of the Company’s short-term borrowed funds:

(in millions)	March 31, 2016		December 31, 2015
Federal funds purchased		$23		$—
Securities sold under agreements to repurchase	691		802
Other short-term borrowed funds (primarily current portion of FHLB advances)	3,300		2,630
Total short-term borrowed funds		$4,014		$3,432

Key data related to short-term borrowed funds is presented in the following table:

(dollars in millions)	As of and for the Three Months Ended March 31, 2016			As of and for the Year Ended December 31, 2015
Weighted-average interest rate at period-end:
Federal funds purchased and securities sold under agreements to repurchase	0.01		%	0.15		%
Other short-term borrowed funds (primarily current portion of FHLB advances)	0.57			0.44
Maximum amount outstanding at month-end during the period:
Federal funds purchased and securities sold under agreements to repurchase		$1,274			$5,375
Other short-term borrowed funds (primarily current portion of FHLB advances)	3,300			7,004
Average amount outstanding during the period:
Federal funds purchased and securities sold under agreements to repurchase		$881			$3,364
Other short-term borrowed funds (primarily current portion of FHLB advances)	3,098			5,865
Weighted-average interest rate during the period:
Federal funds purchased and securities sold under agreements to repurchase	0.06		%	0.22		%
Other short-term borrowed funds (primarily current portion of FHLB advances)	0.58			0.28

31

CITIZENS FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following is a summary of the Company’s long-term borrowed funds:

(in millions)	March 31, 2016		December 31, 2015
Citizens Financial Group, Inc.:
4.150% fixed rate subordinated debt, due 2022 (1)		$347		$350
5.158% fixed-to-floating rate subordinated debt, (LIBOR + 3.56%) callable, due 2023 (2)	333		333
3.750% fixed rate subordinated debt, due 2024 (2) (3)	250		250
4.023% fixed rate subordinated debt, due 2024 (2) (4)	214		331
4.082% fixed rate subordinated debt, due 2025 (2) (5)	346		331
4.350% fixed rate subordinated debt, due 2025 (6)	248		250
4.300% fixed rate subordinated debt, due 2025 (7)	749		750
Banking Subsidiaries:
1.600% senior unsecured notes, due 2017 (8) (9)	752		749
2.300% senior unsecured notes, due 2018 (8) (10)	753		747
2.450% senior unsecured notes, due 2019 (8) (11)	763		752
2.500% senior unsecured notes, due 2019 (8)(12)	750		—
Federal Home Loan advances due through 2033	4,516		5,018
Other	14		25
Total long-term borrowed funds		$10,035		$9,886

⁽¹⁾ These balances are comprised of: principal balances of $350 million at March 31, 2016 and December 31, 2015, as well as the impact of ($3) million of unamortized deferred issuance costs and discount at March 31, 2016.

⁽²⁾ Borrowed funds with RBS. See Note 13 “Related Party Transactions and Significant Transactions with RBS” for further information.

⁽³⁾ Prior to January 1, 2016, interest was payable at a fixed rate per annum of 4.153%.

⁽⁴⁾ These balances are comprised of: principal balance of $208 million and $333 million at March 31, 2016 and December 31, 2015, respectively, as well as the impact from interest rate swaps of $6 million and ($2) million at March 31, 2016 and December 31, 2015, respectively. See Note 11 “Derivatives” for further information. In addition, on March 7, 2016, the Company repurchased $125 million of these securities from RBS. See Note 13 “Related Party Transactions and Significant Transactions with RBS” for further information.

⁽⁵⁾ These balances are comprised of: principal balance of $334 million at March 31, 2016 and December 31, 2015; impact from interest rate swaps of $12 million and ($3) million at March 31, 2016 and December 31, 2015, respectively. See Note 11 “Derivatives” for further information.

⁽⁶⁾ These balances are comprised of: principal balances of $250 million at March 31, 2016 and December 31, 2015, as well as the impact of ($2) million of unamortized deferred issuance costs and discount at March 31, 2016.

⁽⁷⁾ These balances are comprised of: principal balances of $750 million at March 31, 2016 and December 31, 2015, as well as the impact of ($1) million of unamortized deferred issuance costs and discount at March 31, 2016.

⁽⁸⁾ These securities were offered under CBNA’s Global Bank Note Program dated December 1, 2014.

⁽⁹⁾ These balances are comprised of: principal balances of $750 million at March 31, 2016 and December 31, 2015; impact from interest rate swaps of $3 million and ($1) million at March 31, 2016 and December 31, 2015, respectively; and ($1) million of unamortized deferred issuance costs and discount at March 31, 2016. See Note 11 “Derivatives” for further information.

⁽¹⁰⁾ These balances are comprised of: principal balances of $750 million at March 31, 2016 and December 31, 2015; impact from interest rate swaps of $6 million and ($3) million at March 31, 2016 and December 31, 2015, respectively; and ($3) million of unamortized deferred issuance costs and discount at March 31, 2016. See Note 11 “Derivatives” for further information.

⁽¹¹⁾ These balances are comprised of: principal balances of $750 million at March 31, 2016 and December 31, 2015; impact from interest rate swaps of $16 million and $2 million at March 31, 2016 and December 31, 2015, respectively; and ($3) million of unamortized deferred issuance costs and discount at March 31, 2016. See Note 11 “Derivatives” for further information.

⁽¹²⁾ The balance is comprised of: principal balance of $750 million at March 31, 2016; impact from interest rate swaps of $2 million and $(2) million of unamortized deferred issuance costs and discount at March 31, 2016. See Note 11 “Derivatives” for further information.

Advances, lines of credit, and letters of credit from the FHLB are collateralized by pledged mortgages and pledged securities at least sufficient to satisfy the collateral maintenance level established by the FHLB. The utilized borrowing capacity for FHLB advances and letters of credit was $12.1 billion and $11.3 billion at March 31, 2016 and December 31, 2015, respectively. The Company’s available FHLB borrowing capacity was $3.5 billionand $4.1 billion at March 31, 2016 and December 31, 2015, respectively. The Company can also borrow from the FRB discount window to meet short-term liquidity requirements. Collateral, such as investment securities and loans, was pledged to provide borrowing capacity at the FRB. At March 31, 2016, the Company’s unused secured borrowing capacity was approximately $31.6 billion, which includes unencumbered securities, FHLB borrowing capacity, and FRB discount window capacity.

32

CITIZENS FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following is a summary of maturities for the Company’s long-term borrowed funds at March 31, 2016:

Year (in millions)	CFG Parent Company		Banking Subsidiaries		Consolidated
2017 or on demand		$—		$5,256		$5,256
2018	—		759		759
2019	—		1,514		1,514
2020	—		2		2
2021	—		5		5
2022 and thereafter	2,487		12		2,499
Total		$2,487		$7,548		$10,035

NOTE 8 - STOCKHOLDERS’ EQUITY

Preferred Stock

The Company had 100,000,000 shares authorized and 250,000 shares outstanding of $25.00 par value undesignated preferred stock as of March 31, 2016 and December 31, 2015, respectively. The Board of Directors or any authorized committee thereof are authorized to provide for the issuance of these shares in one or more series, and by filing a certificate pursuant to applicable law of the State of Delaware, to establish or change from time to time the number of shares of each such series, and to fix the designations, powers, including voting powers, full or limited, or no voting powers, preferences and the relative, participating, optional or other special rights of the shares of each series and any qualifications, limitations and restrictions thereof.

On April 6, 2015, the Company issued $250 million, or 250,000 shares, of 5.500% fixed-to-floating rate non-cumulative perpetual Series A Preferred Stock, par value of $25.00 per share with a liquidation preference $1,000 per share (the “Series A Preferred Stock”) to the initial purchasers in reliance on the exemption from registration provided by Section (4)(a)(2) of the Securities Act of 1933, as amended, for resale pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended. As a result of this issuance, the Company received net proceeds of $247 million after underwriting discount.

The Series A Preferred Stock has no stated maturity and is not subject to any sinking fund or other obligation of the Company. Holders of the Series A Preferred Stock will be entitled to receive dividend payments when, and if, declared by the Company’s Board of Directors or a duly authorized committee thereof. Any such dividends will be payable on a semi-annual basis at an annual rate equal to 5.500%. On April 6, 2020, the Series A Preferred Stock converts to a quarterly floating-rate basis equal to three-month U.S. dollar LIBOR on the related dividend determination date plus 3.960%.

Citizens may redeem the Series A Preferred Stock, in whole or in part on any dividend payment date, on or after April 6, 2020 or, in whole but not in part, at any time within 90 days following a regulatory capital treatment event at a redemption price equal to $1,000 per share, plus any declared and unpaid dividends, without accumulation of any undeclared dividends. Citizens may not redeem shares of the Series A Preferred Stock without obtaining the prior approval of the FRBG if then required under applicable capital guidelines.

Shares of the Series A Preferred Stock have priority over the Company's common stock with regard to the payment of dividends and, as such, the Company may not pay dividends on or repurchase, redeem, or otherwise acquire for consideration shares of its common stock unless dividends for the Series A Preferred Stock have been declared for that period and sufficient funds have been set aside to make payment.

Except in certain limited circumstances, the Series A Preferred Stock does not have any voting rights.

Treasury Stock

On August 3, 2015, CFG used the net proceeds of its public offering of $250 million aggregate principal amount 4.350% Subordinated Notes due 2025 issued on July 31, 2015, to repurchase 9,615,384 shares of its outstanding common stock directly from RBS at a public offering price of $26.00 per share. The repurchased shares are held in treasury.

On April 7, 2015, the Company used the net proceeds of the Series A Preferred Stock offering to repurchase 10,473,397 shares of its common stock from RBS at a total cost of approximately $250 million and a price per share of $23.87, which equaled the volume-weighted average price of the Company’s common stock for all traded volume over the five trading days preceding the repurchase agreement date of April 1, 2015. The repurchased shares are held in treasury.

33

CITIZENS FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

No treasury stock activity was recorded during the three months ended March 31, 2016. During the year ended December 31, 2015, the Company recorded an additional 876,087 shares of treasury stock associated with share-based compensation plan activity for a total cost of $22 million at a weighted-average price per share of $25.50.

NOTE 9 - EMPLOYEE BENEFITS

The Company maintains a non-contributory pension plan (the “Plan” or “qualified plan”) that was closed to new hires and re-hires effective January 1, 2009, and frozen to all participants effective December 31, 2012. Benefits under the Plan are based on employees’ years of service and highest five-year average of eligible compensation. The Plan is funded on a current basis, in compliance with the requirements of ERISA. The Company also provides an unfunded, non-qualified supplemental retirement plan (the “non-qualified plan”), which was closed and frozen effective December 12, 2012.

The following table presents the components of net periodic (income) cost for the Company’s qualified and non-qualified plans:

	Three Months Ended March 31,
	Qualified Plan						Non-Qualified Plan				Total
(in millions)	2016			2015			2016		2015		2016			2015
Service cost		$1			$1			$—		$—		$1			$1
Interest cost	11			11			1		1		12			12
Expected return on plan assets	(17		)	(18		)	—		—		(17		)	(18		)
Amortization of actuarial loss	4			3			—		1		4			4
Net periodic pension (income) cost		($1	)		($3	)		$1		$2		$—			($1	)

NOTE 10 - INCOME TAXES

Income Tax Provision

The provision for income taxes was $109 million and $106 million for the three months ended March 31, 2016 and 2015, respectively, resulting in effective tax rates of 32.9% and 33.7%, respectively. For the three months ended March 31, 2016 and 2015, the effective tax rate compared favorably to the statutory rate of 35% primarily as a result of the permanent benefits of tax credits and tax-exempt income.

Deferred Tax Liability

At March 31, 2016, the Company reported a net deferred tax liability of $852 million, compared to a $730 million liability as of December 31, 2015. The increase in the net deferred tax liability is primarily attributable to the tax effect of net unrealized gains on securities and derivatives arising during the period.

NOTE 11 - DERIVATIVES

In the normal course of business, the Company enters into a variety of derivative transactions in order to meet the financing needs of its customers and to reduce its own exposure to fluctuations in interest rates and foreign currency exchange rates. The Company does not use derivatives for speculative purposes.

The Company’s derivative instruments are recognized on the Consolidated Balance Sheets at fair value. Information regarding the valuation methodology and inputs used to estimate the fair value of the Company’s derivative instruments is described in Note 14 “Fair Value Measurements.”

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CITIZENS FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following table identifies derivative instruments included on the Consolidated Balance Sheets in derivative assets and derivative liabilities:

	March 31, 2016								December 31, 2015
(in millions)	Notional Amount (1)		Derivative Assets			Derivative Liabilities			Notional Amount (1)		Derivative Assets			Derivative Liabilities
Derivatives designated as hedging instruments:
Interest rate swaps		$14,000		$296			$167			$16,750		$96			$50
Derivatives not designated as hedging instruments:
Interest rate swaps	35,896		739			658			33,719		540			455
Foreign exchange contracts	8,928		146			138			8,366		163			156
Other contracts	1,117		11			8			981		8			5
Total derivatives not designated as hedging instruments			896			804					711			616
Gross derivative fair values			1,192			971					807			666
Less: Gross amounts offset in the Consolidated Balance Sheets (2)			(123		)	(123		)			(178		)	(178		)
Less: Cash collateral applied (2)			(1		)	(16		)			(4		)	(3		)
Total net derivative fair values presented in the Consolidated Balance Sheets (3)				$1,068			$832					$625			$485

⁽¹⁾ The notional or contractual amount of interest rate derivatives and foreign exchange contracts is the amount upon which interest and other payments under the contract are based. Notional amounts are typically not exchanged. Therefore, notional amounts should not be taken as the measure of credit or market risk, as they do not measure the true economic risk of these contracts.

⁽²⁾ Amounts represent the impact of legally enforceable master netting agreements that allow the Company to settle positive and negative positions.

⁽³⁾ The Company also offsets assets and liabilities associated with repurchase agreements on the Consolidated Balance Sheets. See Note 2 “Securities” for further information.

The Company’s derivative transactions are internally divided into three sub-groups: institutional, customer and residential loan.

Institutional derivatives

The institutional derivatives portfolio primarily consists of interest rate swap agreements that are used to hedge the interest rate risk associated with the Company’s loans and financing liabilities (i.e., borrowed funds, deposits, etc.). The goal of the Company’s interest rate hedging activities is to manage interest rate sensitivity so that movements in interest rates do not significantly adversely affect net interest income.

The Company enters into certain interest rate swap agreements to hedge the risk associated with floating rate loans. By entering into pay-floating/receive-fixed interest rate swaps, the Company was able to minimize the variability in the cash flows of these assets due to changes in interest rates. The Company has outstanding interest rate swap agreements designed to hedge a portion of the Company’s borrowed funds and deposits. By entering into a pay-fixed/receive-floating interest rate swap, a portion of these liabilities has been effectively converted to a fixed rate liability for the term of the interest rate swap agreement. The Company has also entered into a forward-starting interest rate swap to minimize the exposure to variability in the interest cash flows on a forecasted fixed rate debt issuance.

The Company also uses receive-fixed/pay-floating interest rate swaps to manage the interest rate exposure on our medium term borrowings.

Customer derivatives

The customer derivatives portfolio consists of interest rate swap agreements and option contracts that are transacted to meet the financing needs of the Company’s customers. Offsetting swap and cap agreements are simultaneously transacted to effectively eliminate the Company’s market risk associated with the customer derivative products. The customer derivatives portfolio also includes foreign exchange contracts that are entered into on behalf of customers for the purpose of hedging exposure related to cash orders and loans and deposits denominated in foreign currency. The primary risks associated with these transactions arise from exposure to changes in foreign currency exchange rates and the ability of the counterparties to meet the terms of the contract. To manage this market risk, the Company simultaneously enters into offsetting foreign exchange contracts.

35

CITIZENS FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Residential loan derivatives

The Company enters into residential loan commitments that allow residential mortgage customers to lock in the interest rate on a residential mortgage while the loan undergoes the underwriting process. The Company also uses forward sales contracts to protect the value of residential mortgage loans and loan commitments that are being underwritten for future sale to investors in the secondary market.

The Company has certain derivative transactions that are designated as hedging instruments described as follows:

Derivatives designated as hedging instruments

The Company’s entire institutional hedging portfolio qualifies for hedge accounting. This includes interest rate swaps that are designated in highly effective fair value and cash flow hedging relationships. The Company formally documents at inception all hedging relationships, as well as risk management objectives and strategies for undertaking various accounting hedges. Additionally, the Company uses dollar offset or regression analysis at the hedge’s inception, and monthly thereafter to assess whether the derivatives are expected to be, or have been, highly effective in offsetting changes in the hedged item’s expected cash flows. The Company discontinues hedge accounting when it is determined that a derivative is not expected to be or has ceased to be effective as a hedge, and then reflects changes in fair value in earnings after termination of the hedge relationship.

Fair value hedges

The Company entered into interest rate swap agreements to manage the interest rate exposure on its medium term borrowings. The changes in fair value of the fair value hedges, to the extent that the hedging relationship is effective, are recorded through earnings and offset against changes in the fair value of the hedged item.

The following table summarizes certain information related to the Company’s fair value hedges:

	The Effect of Fair Value Hedges on Net Income
	Amounts Recognized in Other Income for the
	Three Months Ended March 31, 2016							Three Months Ended March 31, 2015
(in millions)	Derivative		Hedged Item			Hedge Ineffectiveness		Derivative		Hedged Item			Hedge Ineffectiveness
Hedges of interest rate risk on borrowings using interest rate swaps		$52		($52	)		$—		$9		($9	)		$—

Cash flow hedges

The Company has outstanding interest rate swap agreements designed to hedge a portion of the Company’s floating rate assets, financing liabilities (including its borrowed funds), and a forecasted debt issuance. All of these swaps have been deemed as highly effective cash flow hedges. The effective portion of the hedging gains and losses associated with these hedges are recorded in OCI; the ineffective portion of the hedging gains and losses is recorded in earnings (other income). Hedging gains and losses on derivative contracts reclassified from OCI to current period earnings are included in the line item in the accompanying Consolidated Statements of Operations in which the hedged item is recorded and in the same period that the hedged item affects earnings. During the next 12 months, approximately $1 million of net gain (pre-tax) on derivative instruments included in OCI is expected to be reclassified to net interest income in the Consolidated Statements of Operations.

Hedging gains and losses associated with the Company’s cash flow hedges are immediately reclassified from OCI to current period earnings (other income) if it becomes probable that the hedged forecasted transactions will not occur during the originally specified time period.

36

CITIZENS FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following table summarizes certain information related to the Company’s cash flow hedges:

The Effect of Cash Flow Hedges on Net Income and Stockholders' Equity
	Amounts Recognized for the Three Months Ended March 31,
(in millions)	2016			2015
Effective portion of gain recognized in OCI (1)		$54			$104
Amounts reclassified from OCI to interest income (2)	22			18
Amounts reclassified from OCI to interest expense (2)	(8		)	(15		)
Ineffective portion of gain recognized in other income (3)	—			1

⁽¹⁾ The cumulative effective gains and losses on the Company’s cash flow hedging activities are included on the accumulated other comprehensive loss line item on the Consolidated Balance Sheets.

⁽²⁾ This amount includes both (a) the amortization of effective gains and losses associated with the Company’s terminated cash flow hedges and (b) the current reporting period’s interest settlements realized on the Company’s active cash flow hedges. Both (a) and (b) were previously included on the accumulated other comprehensive loss line item on the Consolidated Balance Sheets and were subsequently recorded as adjustments to the interest expense of the underlying hedged item.

⁽³⁾This amount represents the net ineffectiveness recorded during the reporting periods presented plus any amounts excluded from effectiveness testing. These amounts are reflected in the other income line item on the Consolidated Statements of Operations.

Economic hedges

The Company’s customer derivatives are recorded on the Consolidated Balance Sheets at fair value. These include interest rate and foreign exchange derivative contracts that are transacted to meet the hedging and financing needs of the Company’s customers. Mark-to-market adjustments to the fair value of customer related interest rate contracts are included in other income in the accompanying Consolidated Statements of Operations. Mark-to-market adjustments to the fair value of foreign exchange contracts relating to foreign currency loans are included in interest and fees on loans and leases in the accompanying Consolidated Statements of Operations, while all other foreign currency contract fair value changes are included in foreign exchange and letter of credit fees. In both cases, the mark-to-market gains and losses associated with the customer derivatives are mitigated by the mark-to-market gains and losses on the offsetting interest rate and foreign exchange derivative contracts transacted.

The Company’s residential loan derivatives (including residential loan commitments and forward sales contracts) are recorded on the Consolidated Balance Sheets at fair value. Mark-to-market adjustments to the fair value of residential loan commitments and forward sale contracts are included in noninterest income under mortgage banking fees.

The following table summarizes certain information related to the Company’s customer derivatives and economic hedges:

The Effect of Customer Derivatives and Economic Hedges on Net Income
	Amounts Recognized in Noninterest Income for the Three Months Ended March 31,
(in millions)	2016			2015
Customer derivative contracts
Customer interest rate contracts (1)		$97			$73
Customer foreign exchange contracts (1)	51			(35		)
Residential loan commitments (2)	4			—
Economic hedges
Offsetting derivatives transactions to hedge interest rate risk on customer interest rate contracts (1)	(91		)	(68		)
Offsetting derivatives transactions to hedge foreign exchange risk on customer foreign exchange contracts (3)	(50		)	35
Forward sale contracts (2)	(5		)	(1		)
Total		$6			$4

⁽¹⁾ Reported in other income on the Consolidated Statements of Operations.

⁽²⁾ Reported in mortgage banking fees on the Consolidated Statements of Operations.

⁽³⁾ Reported in foreign exchange and letter of credit fees on the Consolidated Statements of Operations.

37

CITIZENS FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 12 - COMMITMENTS AND CONTINGENCIES

The following is a summary of outstanding off-balance sheet arrangements:

(in millions)	March 31, 2016		December 31, 2015
Commitment amount:
Undrawn commitments to extend credit		$56,989		$56,524
Financial standby letters of credit	1,921		2,010
Performance letters of credit	41		42
Commercial letters of credit	63		87
Marketing rights	47		47
Risk participation agreements	53		26
Residential mortgage loans sold with recourse	10		10
Total		$59,124		$58,746

Commitments to Extend Credit

Commitments to extend credit are agreements to lend to customers in accordance with conditions contractually agreed upon in advance. Generally, the commitments have fixed expiration dates or termination clauses and may require payment of a fee. Since many of these commitments are expected to expire without being drawn upon, the contract amounts are not necessarily indicative of future cash requirements.

Letters of Credit

Standby letters of credit, both financial and performance, are issued by the Company for its customers. They are used as conditional guarantees of payment to a third party in the event the customer either fails to make specific payments (financial) or fails to complete a specific project (performance). Commercial letters of credit are used to facilitate the import of goods. The commercial letter of credit is used as the method of payment to the Company’s customers’ suppliers. The Company’s exposure to credit loss in the event of counterparty nonperformance in connection with the above instruments is represented by the contractual amount of those instruments, net of the value of collateral held. Standby letters of credit and commercial letters of credit are issued for terms of up to ten years and one year, respectively.

Generally, letters of credit are collateralized by cash, accounts receivable, inventory or investment securities. Credit risk associated with letters of credit is considered in determining the appropriate amounts of reserves for unfunded commitments.

The Company recognizes a liability on the Consolidated Balance Sheets representing its obligation to stand ready to perform over the term of the standby letters of credit in the event that the specified triggering events occur. The liability for these guarantees was $3 million at March 31, 2016 and December 31, 2015.

Marketing Rights

During 2003, the Company entered into a 25-year agreement to acquire the naming and marketing rights of a baseball stadium in Pennsylvania. The Company did not make any payment for the three months ended March 31, 2016, paid $3 million for the year ended December 31, 2015, and is obligated to pay $47 million over the remainder of the contract, including $3 million later in the year.

Risk Participation Agreements

RPAs are guarantees issued by the Company to other parties for a fee, whereby the Company agrees to participate in the credit risk of a derivative customer of the other party. Under the terms of these agreements, the “participating bank” receives a fee from the “lead bank” in exchange for the guarantee of reimbursement if the customer defaults on an interest rate swap. The interest rate swap is transacted such that any and all exchanges of interest payments (favorable and unfavorable) are made between the lead bank and the customer. In the event that an early termination of the swap occurs and the customer is unable to make a required close out payment, the participating bank assumes that obligation and is required to make this payment.

RPAs where the Company acts as the lead bank are referred to as “participations-out,” in reference to the credit risk associated with the customer derivatives being transferred out of the Company. Participations-out generally occur concurrently with the sale of new customer derivatives. RPAs where the Company acts as the participating bank are referred to as “participations-in,” in reference to the credit risk associated with the counterparty’s derivatives being assumed by the Company. The Company’s maximum credit exposure is based on its proportionate share of the settlement amount of the referenced interest rate swap. Settlement amounts are generally calculated based on the fair value of the swap plus outstanding accrued interest receivables from the customer.

38

CITIZENS FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The Company’s estimate of the credit exposure associated with its risk participations-in as of March 31, 2016 and December 31, 2015 is $53 million and $26 million, respectively. The current amount of credit exposure is spread out over 89 counterparties. RPAs generally have terms ranging from 1-5 years; however, certain outstanding agreements have terms as long as 10 years.

Other Commitments

In November 2015, the Company entered into an agreement with RBS to purchase $500 million of its subordinated notes held by RBS by July 30, 2016, subject to regulatory approval and rating agency considerations. See Note 13 “Related party transactions and significant transactions with RBS” for more information.

On January 7, 2016, the Company entered into an agreement to purchase student loans on a quarterly basis beginning with the first calendar quarter in 2016 and ending with the fourth calendar quarter in 2016. Under the terms of the agreement, the Company committed to purchase a minimum of $125 million of loans per quarter. The minimum and maximum amount of the aggregate purchase principal balance of loans under the terms of the agreement are $500 million and $1 billion, respectively. The agreement will terminate immediately if at any time during its term the aggregate purchase principal balance of loans equals the maximum amount. The agreement may be extended by written agreement of the parties for an additional four quarters. The Company may terminate the agreement at will with payment of a termination fee equal to the product of $1 million times the number of calendar quarters remaining in the term.     

The Company’s agreement to purchase automobile loans, originally entered into in May 2014, was most recently amended on January 15, 2016. For quarterly periods on or after August 1, 2015, the minimum and maximum purchases are $50 million and $200 million, respectively. The agreement automatically renews until terminated by either party. The Company may cancel the agreement at will with payment of a variable termination fee. There is no termination fee after May 2017.

The Company’s commercial loan trading desk provides ongoing secondary market support and liquidity to its clients. Unsettled loan trades (i.e., loan purchase contracts) represent firm commitments to purchase loans from a third party at an agreed-upon price. Principal amounts associated with unsettled commercial loan trades are off-balance sheet commitments until delivery of the loans has taken place. Fair value adjustments associated with each unsettled loan trade are recognized on the Consolidated Balance Sheets and classified within other assets or other liabilities, depending on whether the fair value of the unsettled trade represents an unrealized gain or unrealized loss. The principal balance of unsettled commercial loan trade purchases and sales were $98 million and $125 million, respectively, at March 31, 2016. Settled loans purchased by the trading desk are classified as loans held for sale, at fair value on the Consolidated Balance Sheets. Refer to Note 14 “Fair Value Measurements” for further information.

Contingencies

The Company operates in a legal and regulatory environment that exposes it to potentially significant risks. A certain amount of litigation ordinarily results from the nature of the Company’s banking and other businesses. The Company is a party to legal proceedings, including class actions. The Company is also the subject of investigations, reviews, subpoenas, and regulatory matters arising out of its normal business operations, which, in some instances, relate to concerns about fair lending, unfair and/or deceptive practices, mortgage-related issues, and mis-selling of certain products. In addition, the Company engages in discussions with relevant governmental and regulatory authorities on a regular and ongoing basis regarding various issues, and any issues discussed or identified may result in investigatory or other action being taken. Litigation and regulatory matters may result in settlements, damages, fines, penalties, public or private censure, increased costs, required remediation, restrictions on business activities, or other impacts on the Company.

In these disputes and proceedings, the Company contests liability and the amount of damages as appropriate. Given their complex nature, it may be years before some of these matters are finally resolved. Moreover, before liability can be reasonably estimated for a claim, numerous legal and factual issues may need to be examined, including through potentially lengthy discovery and determination of important factual matters, and by addressing novel or unsettled legal issues relevant to the proceedings in question.

The Company cannot predict with certainty if, how, or when such claims will be resolved or what the eventual settlement, fine, penalty or other relief, if any, may be, particularly for claims that are at an early stage in their development or where claimants seek substantial or indeterminate damages. The Company recognizes a provision for a claim when, in the opinion of management after seeking legal advice, it is probable that a liability exists and the amount of loss can be reasonably estimated. In many proceedings, however, it is not possible to determine whether any loss is probable or to estimate the amount of any loss. In each of the matters described below, the Company is unable to estimate the liability in excess of any provision accrued, if any, that might arise or its effects on the Company’s Consolidated Statements of Operations or Consolidated Statements of Cash Flows in any particular period.

Set out below is a description of significant legal matters involving the Company and its banking subsidiaries. Based on information currently available, the advice of legal counsel and other advisers, and established reserves, management believes that

39

CITIZENS FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

the aggregate liabilities, if any, potentially arising from these proceedings will not have a materially adverse effect on the Company’s unaudited interim Consolidated Financial Statements.

Consumer Products Matters

The activities of the Company’s banking subsidiaries are subject to extensive laws and regulations concerning unfair or deceptive acts or practices in connection with customer products. Certain of the banking subsidiaries’ past practices have not met applicable standards, and they have implemented and are continuing to implement changes to improve and bring their practices in accordance with regulatory guidance. The Company and its banking subsidiaries have actively pursued resolution of the legacy regulatory enforcement matters set forth below.

As previously reported, CBNA is currently subject to a consent order issued in 2013 by the OCC in connection with its findings of deceptive marketing and implementation of some of our checking account and funds transfer products and services. Among other things, the consent order requires us to remedy deficiencies and develop stronger compliance controls, policies and procedures. The Company and its banking subsidiaries are also currently subject to consent orders issued in August 2015 by the CFPB, the OCC and the FDIC in connection with past deposit reconciliation practices, and CBNA is subject to a consent order issued in November 2015 by the OCC in connection with past billing and sales practices pertaining to identity theft and debt cancellation products, under which the applicable regulators have provided non-objections to, among other things, restitution plans for affected customers.

Accordingly, all financial penalties associated with these legacy regulatory enforcement matters have been paid, and substantially all remediation related to such legacy matters is expected to be resolved by the end of 2016.

NOTE 13 - RELATED PARTY TRANSACTIONS AND SIGNIFICANT TRANSACTIONS WITH RBS

On November 3, 2015, RBS completed the sale of all of its remaining shares of CFG’s common stock. The parenthetical disclosures related to long-term borrowed funds on the Consolidated Balance Sheets, Consolidated Statements of Operations, and Consolidated Statements of Cash Flows as well as the tables and discussions below include significant related party transactions with RBS prior to the Company’s separation from RBS and significant transactions subsequent to the separation.    

In September 2014, the Company entered into certain agreements that established a framework for its ongoing relationship with RBS. Specifically, the Company entered into the following agreements with RBS: Separation and Shareholder Agreement, Registration Rights Agreement, Trade Mark License Agreement, Amended and Restated Master Services Agreement, and Transitional Services Agreements. In connection with RBS’s exit of its ownership in our common stock in 2015, the Separation and Shareholder Agreement and the Registration Rights Agreement were terminated and the Trademark License Agreement was partially terminated.

The following is a summary of borrowed funds from RBS:

	Interest Rate			Maturity Date	March 31, 2016	December 31, 2015
(dollars in millions)
Subordinated debt	5.158	%		June 2023	$333		$333
	3.750	%	(1)	July 2024	250	250
	4.023	%	(2)	October 2024	208	333
	4.082	%		January 2025	334	334

⁽¹⁾ Prior to January 1, 2016, interest was payable at a fixed rate per annum of 4.153%.

⁽²⁾ On March 7, 2016, the Company repurchased $125 million of these securities from RBS.

The following table presents total interest expense recorded on subordinated debt with RBS:

	Three Months Ended March 31,
(in millions)	2016		2015
Interest expense on subordinated debt		$11		$20

40

CITIZENS FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

On March 7, 2016, the Company repurchased $125 million of its subordinated notes held by RBS. On December 3, 2015, the Company repurchased $750 million of outstanding subordinated debt instruments held by RBS. The $3 million difference between the reacquisition price and the net carrying amount of the repurchased debt was recognized as a gain on extinguishment of the debt and is presented in other income in the Consolidated Statement of Operations. In November 2015, the Company entered into an agreement with RBS to purchase an additional $500 million of its subordinated notes held by RBS by July 30, 2016, subject to regulatory approval and ratings agency considerations.

The Company paid no dividends to RBS for the three months endedMarch 31, 2016. For the three months endedMarch 31, 2015, the Company paid $39 million in regular common stock dividends to RBS.

Additionally, during 2015 the Company engaged in repurchases of its common stock directly from RBS. Refer to Note 8 “Stockholders’ Equity” for further information.

The Company, as a matter of policy and during the ordinary course of business with underwriting terms similar to those offered to the public, has entered into credit facilities with directors and executive officers and their immediate families, as well as their affiliated companies. Extensions of credit amounted to $126 million and $136 million at March 31, 2016 and December 31, 2015, respectively.

NOTE 14 - FAIR VALUE MEASUREMENTS

As discussed in Note 1 “Significant Accounting Policies,” to the Company’s audited Financial Statements in the Annual Report on Form 10-K for the year ended December 31, 2015, the Company measures or monitors many of its assets and liabilities on a fair value basis. Fair value is used on a recurring basis for assets and liabilities for which fair value is the required or elected measurement basis of accounting. Additionally, fair value is used on a nonrecurring basis to evaluate assets for impairment or for disclosure purposes. Nonrecurring fair value adjustments typically involve the application of lower of cost or market accounting or write-downs of individual assets. The Company also applies the fair value measurement guidance to determine amounts reported for certain disclosures in this Note for assets and liabilities not required to be reported at fair value in the financial statements.

The Company elected to account for residential mortgage loans held for sale and certain commercial and commercial real estate loans held for sale at fair value. Applying fair value accounting to the residential mortgage loans held for sale better aligns the reported results of the economic changes in the value of these loans and their related hedge instruments. Certain commercial and commercial real estate held for sale loans are managed by a commercial secondary loan desk that provides liquidity to banks, finance companies and institutional investors. Applying fair value accounting to this portfolio is appropriate because the Company holds these loans with the intent to sell within short term periods.

Fair Value Option

Residential Mortgage Loans Held for Sale

The fair value of residential mortgage loans held for sale is derived from observable mortgage security prices and includes adjustments for loan servicing value, agency guarantee fees, and other loan level attributes which are mostly observable in the marketplace. Credit risk does not significantly impact the valuation since these loans are sold shortly after origination. Therefore, the Company classifies the residential mortgage loans held for sale in Level 2 of the fair value hierarchy.

The election of the fair value option for financial assets and financial liabilities is optional and irrevocable. The loans accounted for under the fair value option are initially measured at fair value (i.e., acquisition cost) when the financial asset is acquired. Subsequent changes in fair value are recognized in mortgage banking fees on the Consolidated Statements of Operations. The Company recognized mortgage banking income of $6 million and $1 million for the three months ended March 31, 2016 and 2015, respectively.

Interest income on residential mortgage loans held for sale is calculated based on the contractual interest rate of the loan and is recorded in interest income.

Commercial and Commercial Real Estate Loans Held for Sale

The fair value of commercial and commercial real estate loans held for sale is estimated using observable prices of identical or similar loans that transact in the marketplace. In addition, the Company uses external pricing services that provide estimates of fair values based on quotes from various dealers transacting in the market, sector curves or benchmarking techniques. Therefore, the Company classifies the commercial and commercial real estate loans managed by the commercial secondary loan desk in Level 2 of the fair value hierarchy given the observable market inputs.

41

CITIZENS FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

There were no loans in this portfolio that were 90 days or more past due or nonaccruing as of March 31, 2016. The loans accounted for under the fair value option are initially measured at fair value when the financial asset is recognized. Subsequent changes in fair value are recognized in current earnings. Since all loans in the Company’s commercial trading portfolio consist of floating rate obligations, all changes in fair value are due to changes in credit risk. Such credit-related fair value changes may include observed changes in overall credit spreads and/or changes to the creditworthiness of an individual borrower. Unsettled trades within the commercial trading portfolio are not recognized on the Consolidated Balance Sheets and represent off-balance sheet commitments. Refer to Note 12 “Commitments and Contingencies” for further information.

Interest income on commercial and commercial real estate loans held for sale is calculated based on the contractual interest rate of the loan and is recorded in interest income. Additionally, the Company did not recognize income for the three months ended March 31, 2016, and recognized $1 million for the three months ended March 31, 2015, in other noninterest income related to its commercial trading portfolio.

The following table summarizes the difference between the aggregate fair value and the aggregate unpaid principal balance loans held for sale measured at fair value:

	March 31, 2016						December 31, 2015
(in millions)	Aggregate Fair Value		Aggregate Unpaid Principal		Aggregate Fair Value Less Aggregate Unpaid Principal		Aggregate Fair Value		Aggregate Unpaid Principal		Aggregate Fair Value Less Aggregate Unpaid Principal
Residential mortgage loans held for sale, at fair value		$292		$281		$11		$268		$263		$5
Commercial and commercial real estate loans held for sale, at fair value	73		73		—		57		57		—

Recurring Fair Value Measurements

The Company utilizes a variety of valuation techniques to measure its assets and liabilities at fair value. Following is a description of valuation methodologies used for significant assets and liabilities carried on the balance sheet at fair value on a recurring basis:

Securities available for sale

The fair value of securities classified as AFS is based upon quoted prices, if available. Where observable quoted prices are available in an active market, securities are classified as Level 1 in the fair value hierarchy. Classes of instruments that are valued using this market approach include debt securities issued by the U.S. Treasury. If quoted market prices are not available, the fair value for the security is estimated by using pricing models, quoted prices of securities with similar characteristics or discounted cash flows. These instruments are classified as Level 2 because they currently trade in active markets and the inputs to the valuations are observable. The pricing models used to value securities generally begin with market prices (or rates) for similar instruments and make adjustments based on the unique characteristics of the instrument being valued. These adjustments reflect assumptions made regarding the sensitivity of each security’s value to changes in interest rates and prepayment speeds. Classes of instruments that are valued using this market approach include residential and commercial CMOs, specified pool mortgage “pass-through” securities and other debt securities issued by U.S. government-sponsored entities and state and political subdivisions.

A significant majority of the Company’s Level 1 and 2 securities are priced using an external pricing service. The Company verifies the accuracy of the pricing provided by its primary outside pricing service on a quarterly basis. This process involves using a secondary external vendor to provide valuations for the Company’s securities portfolio for comparison purposes. Any securities with discrepancies beyond a certain threshold are researched and, if necessary, valued by an independent outside broker.

In certain cases where there is limited activity or less transparency around inputs to the valuation model, securities are classified as Level 3.

Residential loans held for sale

See the “Fair Value Option, Residential Mortgage Loans Held for Sale” discussion above.

42

CITIZENS FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Commercial loans held for sale

See the “Fair Value Option, Commercial and Commercial Real Estate Loans Held for Sale” discussion above.

Derivatives

The vast majority of the Company’s derivatives portfolio is composed of “plain vanilla” interest rate swaps, which are traded in over-the-counter markets where quoted market prices are not readily available. For these interest rate derivatives, fair value is determined utilizing models that use primarily market observable inputs, such as swap rates and yield curves. The pricing models used to value interest rate swaps calculate the sum of each instrument’s fixed and variable cash flows, which are then discounted using an appropriate yield curve (i.e., LIBOR or OIS curve) to arrive at the fair value of each swap. The pricing models do not contain a high level of subjectivity as the methodologies used do not require significant judgment. The Company also considers certain adjustments to the modeled price which market participants would make when pricing each instrument, including a credit valuation adjustment that reflects the credit quality of the swap counterparty. The Company incorporates the effect of exposure to a particular counterparty’s credit by netting its derivative contracts with the collateral available and calculating a credit valuation adjustment on the basis of the net position with the counterparty where permitted. The determination of this adjustment requires judgment on behalf of Company management; however, the total amount of this portfolio-level adjustment is not material to the total fair value of the interest rate swaps in their entirety. Therefore, interest rate swaps are classified as Level 2 in the valuation hierarchy.

The Company’s other derivatives include foreign exchange contracts. Fair value of foreign exchange derivatives uses the mid-point of daily quoted currency spot prices. A valuation model estimates fair value based on the quoted spot rates together with interest rate yield curves and forward currency rates. Since all of these inputs are observable in the market, foreign exchange derivatives are classified as Level 2 in the fair value hierarchy.

Money Market Mutual Fund

Fair value is determined based upon unadjusted quoted market prices and is considered a Level 1 fair value measurement.

Other investments

The fair values of the Company’s other investments are based on security prices in the market that are not active; therefore, these investments are classified as Level 2 in the fair value hierarchy.

43

CITIZENS FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following table presents assets and liabilities measured at fair value, including gross derivative assets and liabilities on a recurring basis at March 31, 2016:

(in millions)	Total		Level 1		Level 2		Level 3
Securities available for sale:
Mortgage-backed securities		$17,922		$—		$17,922		$—
State and political subdivisions	9		—		9		—
Equity securities	17		—		17		—
U.S. Treasury and other	16		15		1		—
Total securities available for sale	17,964		15		17,949		—
Loans held for sale, at fair value:
Residential loans held for sale	292		—		292		—
Commercial loans held for sale	73		—		73		—
Total loans held for sale, at fair value	365		—		365		—
Derivative assets:
Interest rate swaps	1,035		—		1,035		—
Foreign exchange contracts	146		—		146		—
Other contracts	11		—		11		—
Total derivative assets	1,192		—		1,192		—
Other investment securities, at fair value:
Money market mutual fund	63		63		—		—
Other investments	5		—		5		—
Total other investment securities, at fair value	68		63		5		—
Total assets		$19,589		$78		$19,511		$—
Derivative liabilities:
Interest rate swaps		$825		$—		$825		$—
Foreign exchange contracts	138		—		138		—
Other contracts	8		—		8		—
Total derivative liabilities	971		—		971		—
Total liabilities		$971		$—		$971		$—

44

CITIZENS FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following table presents assets and liabilities measured at fair value including gross derivative assets and liabilities on a recurring basis at December 31, 2015:

(in millions)	Total		Level 1		Level 2		Level 3
Securities available for sale:
Mortgage-backed securities		$17,842		$—		$17,842		$—
State and political subdivisions	9		—		9		—
Equity securities	17		—		17		—
U.S. Treasury	16		15		1		—
Total securities available for sale	17,884		15		17,869		—
Loans held for sale, at fair value:
Residential loans held for sale	268		—		268		—
Commercial loans held for sale	57		—		57		—
Total loans held for sale, at fair value	325		—		325		—
Derivative assets:
Interest rate swaps	636		—		636		—
Foreign exchange contracts	163		—		163		—
Other contracts	8		—		8		—
Total derivative assets	807		—		807		—
Other investment securities, at fair value:
Money market mutual fund	65		65		—		—
Other investments	5		—		5		—
Total other investment securities, at fair value	70		65		5		—
Total assets		$19,086		$80		$19,006		$—
Derivative liabilities:
Interest rate swaps		$505		$—		$505		$—
Foreign exchange contracts	156		—		156		—
Other contracts	5		—		5		—
Total derivative liabilities	666		—		666		—
Total liabilities		$666		$—		$666		$—

The changes in Level 3 assets measured at fair value on a recurring basis are summarized as follows:

	Three Months Ended March 31,
(in millions)	2016		2015
Beginning as of January 1		$—		$5
Purchases, issuances, sales and settlements:
Purchases	—		1
Sales	—		—
Settlements	—		—
Net (losses) gains	—		—
Transfers from Level 3 to Level 2	—		(5		)
Balance as of March 31		$—		$1
Net unrealized gain (loss) included in net income for the year relating to assets held at period end		$—		$1

In March 2015, the Company transferred $5 million of securities from Level 3 to Level 2. The fair values of these securities are based on security prices in the market that are not active.

45

CITIZENS FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Nonrecurring Fair Value Measurements

The following valuation techniques are utilized to measure significant assets for which the Company utilizes fair value on a nonrecurring basis:

Impaired Loans

The carrying amount of collateral-dependent impaired loans is compared to the appraised value of the collateral less costs to dispose and is classified as Level 2. Any excess of carrying amount over the appraised value is charged to the ALLL.

Mortgage Servicing Rights

MSRs do not trade in an active market with readily observable prices. MSRs are classified as Level 3 since the valuation methodology utilizes significant unobservable inputs. At March 31, 2016, the fair value was calculated using a discounted cash flow model, which used assumptions, including weighted-average life of 4.9 years (range of 2.6 - 5.6 years), weighted-average constant prepayment rate of 13.3% (range of 12.4% - 22.3%) and weighted-average discount rate of 9.7% (range of 9.1% - 12.1%). At December 31, 2015, the fair value was calculated using a discounted cash flow model, which used assumptions, including weighted-average life of 5.4 years (range of 2.8 - 6.2 years), weighted-average constant prepayment rate of 11.6% (range of 10.7% - 22.2%) and weighted-average discount rate of 9.7% (range of 9.1% - 12.1%). Refer to Note 1 “Significant Accounting Policies” to the Company’s audited Consolidated Financial Statements in the Annual Report on Form 10-K for the year ended December 31, 2015 and Note 6 “Mortgage Banking” for more information.

Foreclosed assets

Foreclosed assets consist primarily of residential properties. Foreclosed assets are carried at the lower of carrying value or fair value less costs to dispose. Fair value is based upon independent market prices or appraised values of the collateral and is classified as Level 2.

The following table presents gains (losses) on assets and liabilities measured at fair value on a nonrecurring basis and recorded in earnings:

	Three Months Ended March 31,
(in millions)	2016			2015
Impaired collateral-dependent loans		($5	)		($3	)
MSRs	(5		)	1
Foreclosed assets	(1		)	(1		)

The following table present assets and liabilities measured at fair value on a nonrecurring basis:

	March 31, 2016								December 31, 2015
(in millions)	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Impaired collateral-dependent loans		$39		$—		$39		$—		$60		$—		$60		$—
MSRs	168		—		—		168		178		—		—		178
Foreclosed assets	46		—		46		—		42		—		42		—

Disclosures about Fair Value of Financial Instruments

Following is a description of valuation methodologies used to estimate the fair value of financial instruments for disclosure purposes (these instruments are not recorded in the financial statements at fair value):

Securities held to maturity

The fair value of securities classified as HTM is estimated using pricing models, quoted prices of securities with similar characteristics or discounted cash flow. The pricing models used to value these securities generally begin with market prices (or rates) for similar instruments and make adjustments based on the unique characteristics of the instrument being valued. These adjustments reflect assumptions made regarding the sensitivity of each security’s value to changes in interest rates and prepayment speeds.

46

CITIZENS FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Other investment securities, at cost

The fair value of other investment securities, at cost, such as FHLB stock and FRB stock, is assumed to approximate the cost basis of the securities. As a member of the FHLB and FRB, the Company is required to hold FHLB and FRB stock. The stock can be sold only to the FHLB and FRB upon termination of membership, or redeemed at the FHLB’s or FRB’s sole discretion.

Loans and leases

For loans and leases not recorded at fair value on a recurring basis that are not accounted for as collateral-dependent impaired loans, fair value is estimated by using one of two methods: a discounted cash flow method or a securitization method. The discounted cash flow method involves discounting the expected future cash flows using current rates which a market participant would likely use to value similar pools of loans. Inputs used in this method include observable information such as contractual cash flows (net of servicing cost) and unobservable information such as estimated prepayment speeds, credit loss exposures, and discount rates. The securitization method involves utilizing market securitization data to value the assets as if a securitization transaction had been executed. Inputs used include observable market-based MBS data and pricing adjustments based on unobservable data reflecting the liquidity risk, credit loss exposure and other characteristics of the underlying loans. The internal risk-weighted balances of loans are grouped by product type for purposes of these estimated valuations. For nonaccruing loans, fair value is estimated by discounting management’s estimate of future cash flows with a discount rate commensurate with the risk associated with such assets. Fair value of collateral-dependent loans is primarily based on the appraised value of the collateral.

Other loans held for sale

Balances are loans that were transferred to loans held for sale that are reported at the lower of cost of fair value.

Deposits

The fair value of demand deposits, checking with interest accounts, regular savings and money market accounts is the amount payable on demand at the balance sheet date. The fair value of term deposits is estimated by discounting the expected future cash flows using rates currently offered for deposits of similar remaining maturities.

Federal funds purchased and securities sold under agreements to repurchase, other short-term borrowed funds, and long-term borrowed funds

Rates currently available to the Company for debt of similar terms and remaining maturities are used to discount the expected cash flows of existing debt.

The following table is a summary of fair value for financial instruments not recorded at fair value in the unaudited interim Consolidated Financial Statements. The carrying amounts in the following table are recorded in the Consolidated Balance Sheets under the indicated captions:

	March 31, 2016
	Total				Level 1				Level 2				Level 3
(in millions)	Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value
Financial Assets:
Securities held to maturity		$5,129		$5,261		$—		$—		$5,129		$5,261		$—		$—
Other investment securities, at cost	896		896		—		—		896		896		—		—
Other loans held for sale	386		386		—		—		—		—		386		386
Loans and leases	100,991		101,475		—		—		39		39		100,952		101,436
Financial Liabilities:
Deposits	102,606		102,606		—		—		102,606		102,606		—		—
Federal funds purchased and securities sold under agreements to repurchase	714		714		—		—		714		714		—		—
Other short-term borrowed funds	3,300		3,300		—		—		3,300		3,300		—		—
Long-term borrowed funds	10,035		10,142		—		—		10,035		10,142		—		—

47

CITIZENS FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

	December 31, 2015
	Total				Level 1				Level 2				Level 3
(in millions)	Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value
Financial Assets:
Securities held to maturity		$5,258		$5,297		$—		$—		$5,258		$5,297		$—		$—
Other investment securities, at cost	863		863		—		—		863		863		—		—
Other loans held for sale	40		40		—		—		—		—		40		40
Loans and leases	99,042		99,026		—		—		60		60		98,982		98,966
Financial Liabilities:
Deposits	102,539		102,528		—		—		102,539		102,528		—		—
Federal funds purchased and securities sold under agreements to repurchase	802		802		—		—		802		802		—		—
Other short-term borrowed funds	2,630		2,630		—		—		2,630		2,630		—		—
Long-term borrowed funds	9,886		9,837		—		—		9,886		9,837		—		—

NOTE 15 - REGULATORY MATTERS

As a BHC, the Company is subject to regulation and supervision by the FRB. The primary subsidiaries of the Company are its two insured depository institutions CBNA, a national banking association whose primary federal regulator is the OCC, and CBPA, a Pennsylvania-chartered savings bank regulated by the Department of Banking of the Commonwealth of Pennsylvania and supervised by the FDIC as its primary federal regulator. Under the Basel III capital framework that took effect on January 1, 2015, the Company and its banking subsidiaries must meet specific capital requirements. Basel III requirements are expressed in terms of the following ratios: (1) common equity tier 1 capital (common equity tier 1 capital/risk-weighted on- and off-balance sheet assets); (2) tier 1 capital (tier 1 capital/risk-weighted on- and off-balance sheet assets); (3) total capital (total capital/risk-weighted on- and off-balance sheet assets); and (4) tier 1 leverage (tier 1 capital/adjusted average quarterly assets). To meet the regulatory capital requirements, the Company and its banking subsidiaries must maintain minimum regulatory levels for each ratio. In addition, the Company must not be subject to a written agreement, order or capital directive with any of its regulators. Failure to meet minimum capital requirements can result in the initiation of certain actions that, if undertaken, could have a material effect on the Company’s Consolidated Financial Statements.

48

CITIZENS FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following table presents our capital and capital ratios under Basel III Transitional rules as of March 31, 2016 and December 31, 2015. Certain Basel III requirements are subject to phase-in through 2019, and these phase-in rules are used in this report of actual regulatory ratios. In addition, the Company has declared itself as an “AOCI opt-out” institution, which means that the Company will not be required to change its methodology for recognizing in regulatory capital only a subset of unrealized gains and losses that are classified as AOCI. As an AOCI opt-out institution, the Company is not required to recognize within regulatory capital the impacts of net unrealized gains and losses on securities AFS, accumulated net gains and losses on cash-flow hedges included in AOCI, net gains and losses on certain defined benefit pension plan assets, and net unrealized gains and losses on securities held to maturity that are included in AOCI.

	Transitional Basel III
									FDIA Requirements
	Actual				Minimum Capital Adequacy				Classification as Well-capitalized
(dollars in millions)	Amount		Ratio		Amount		Ratio		Amount		Ratio
As of March 31, 2016
Common equity tier 1 capital (1) (5)		$13,570	11.6	%		$5,975	5.125	%		$7,578	6.5	%
Tier 1 capital (2) (5)	13,817		11.9		7,724		6.625		9,327		8.0
Total capital (3)(5)	17,587		15.1		10,056		8.625		11,659		10.0
Tier 1 leverage (4)	13,817		10.4		5,318		4.000		6,648		5.0
As of December 31, 2015
Common equity tier 1 capital (1)		$13,389	11.7	%		$5,134	4.5	%		$7,415	6.5	%
Tier 1 capital (2)	13,636		12.0		6,845		6.0		9,127		8.0
Total capital (3)	17,505		15.3		9,127		8.0		11,408		10.0
Tier 1 leverage (4)	13,636		10.5		5,218		4.0		6,523		5.0

⁽¹⁾ “Common equity tier 1 capital ratio” represents CET1 divided by total risk-weighted assets as defined under Basel III Standardized approach.

⁽²⁾ “Tier 1 capital ratio” is tier 1 capital, which includes CET1 capital plus non-cumulative perpetual preferred equity that qualifies as additional tier 1 capital, divided by total risk-weighted assets as defined under Basel III Standardized approach.

⁽³⁾ “Total capital ratio” is total capital divided by total risk-weighted assets as defined under Basel III Standardized approach.

⁽⁴⁾ “Tier 1 leverage ratio” is tier 1 capital divided by quarterly average total assets as defined under Basel III Standardized approach.

⁽⁵⁾ “Minimum Capital ratio” for 2016 includes capital conservation buffer of .625%.

Under the Capital Plan Rule, the Company may only make capital distributions, including payment of dividends, in accordance with a capital plan that has been reviewed by the Federal Reserve and to which the Federal Reserve has not objected. In the three months endedMarch 31, 2016, the Company paid total common dividends of approximately $53 million. Additionally, in the three months endedMarch 31, 2016, the Company paid total preferred dividends of approximately $7 million.

In accordance with federal and state banking regulations, dividends paid by the Company’s banking subsidiaries to the Company itself are generally limited to the retained earnings of the respective banking subsidiaries unless specifically approved by the appropriate bank regulator.

On March 13, 2014, the OCC determined that CBNA no longer meets the condition to own a financial subsidiary — namely that CBNA must be both well capitalized and well managed. A financial subsidiary is permitted to engage in a broader range of activities, similar to those of a financial holding company, than those permissible for a national bank itself. CBNA has two financial subsidiaries, Citizens Securities, Inc., a registered broker-dealer, and RBS Citizens Insurance Agency, Inc., a dormant entity. CBNA has entered into an agreement with the OCC pursuant to which the Company has developed and submitted to the OCC a remediation plan, that sets forth the specific actions it will take to bring itself back into compliance with the conditions to own a financial subsidiary. CBNA has made substantial progress toward completing those actions. However, until the plan has been completed to the OCC’s satisfaction, CBNA will be subject to restrictions on its ability to acquire control or hold an interest in any new financial subsidiary and to commence new activities in any existing financial subsidiary without the prior consent of the OCC.

49

CITIZENS FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 16 - EXIT COSTS AND RESTRUCTURING RESERVES

The Company incurred no restructuring costs for the three months endedMarch 31, 2016. For the year ended December 31, 2015, the Company incurred $26 million of restructuring costs, consisting of $17 million of facilities costs in occupancy, $8 million in outside services, and $1 million in salaries and employee benefits, relating to restructuring initiatives designed to enhance operating efficiencies and reduce expense growth.

For segment reporting, all of these restructuring costs are reported within Other. See Note 18 “Business Segments” for further information.

The following table includes the activity in the exit costs and restructuring reserves:

(in millions)	Salaries & Employee Benefits			Occupancy & Equipment			Other			Total
Reserve balance as of January 1, 2015		$23			$18			$3			$44
Additions	5			18			8			31
Reversals	(4		)	(1		)	—			(5		)
Utilization	(12		)	(19		)	(6		)	(37		)
Reserve balance as of December 31, 2015	12			16			5			33
Utilization	(2		)	(2		)	(5		)	(9		)
Reserve balance as of March 31, 2016		$10			$14			$—			$24

NOTE 17 - RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table presents the changes in the balances, net of income taxes, of each component of AOCI:

(in millions)	Net Unrealized Gains (Losses) on Derivatives			Net Unrealized Gains (Losses) on Securities			Defined Benefit Pension Plans			Total AOCI
Balance at January 1, 2015		($69	)		$74			($377	)		($372	)
Other comprehensive income before reclassifications	65			90			—			155
Other-than-temporary impairment not recognized in earnings on securities	—			(19		)	—			(19		)
Amounts reclassified from other comprehensive (loss) income	(2		)	(4		)	2			(4		)
Net other comprehensive income	63			67			2			132
Balance at March 31, 2015		($6	)		$141			($375	)		($240	)
Balance at January 1, 2016		$10			($28	)		($369	)		($387	)
Other comprehensive income before reclassifications	33			154			—			187
Other-than-temporary impairment not recognized in earnings on securities	—			(25		)	—			(25		)
Amounts reclassified from other comprehensive (loss) income	(8		)	(5		)	2			(11		)
Net other comprehensive income	25			124			2			151
Balance at March 31, 2016		$35			$96			($367	)		($236	)

50

CITIZENS FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following table reports the amounts reclassified out of each component of AOCI and into the Consolidated Statements of Operations:

	Three Months Ended March 31,
(in millions)	2016			2015
Details about AOCI Components							Affected Line Item in the Consolidated Statements of Operations
Reclassification adjustment for net derivative gains (losses) included in net income:		$22			$18		Interest income
	(8		)	(15		)	Interest expense
	14			3			Income before income tax expense
	6			1			Income tax expense
		$8			$2		Net income
Reclassification of net securities gains (losses) to net income:		$9			$8		Securities gains, net
	(1		)	(1		)	Net securities impairment losses recognized in earnings
	8			7			Income before income tax expense
	3			3			Income tax expense
		$5			$4		Net income
Reclassification of changes related to defined benefit pension plans:		($4	)		($3	)	Salaries and employee benefits
	(4		)	(3		)	Income before income tax expense
	(2		)	(1		)	Income tax expense
		($2	)		($2	)	Net income
Total reclassification gains (losses)		$11			$4		Net income

The following table presents the effects to net income of the amounts reclassified out of AOCI:

	Three Months Ended March 31,
(in millions)	2016		2015
Net interest income (includes $14 and $3 of AOCI reclassifications, respectively)		$904		$836
Provision for credit losses	91		58
Noninterest income (includes $8 and $7 of AOCI reclassifications, respectively)	330		347
Noninterest expense (includes $4 and $3 of AOCI reclassifications, respectively)	811		810
Income before income tax expense	332		315
Income tax expense (includes $7 and $3 income tax net expense (benefit) from reclassification items, respectively)	109		106
Net income		$223		$209

NOTE 18 - BUSINESS SEGMENTS

The Company is managed by its CEO on a segment basis. The Company’s two business segments are Consumer Banking and Commercial Banking. The business segments are determined based on the products and services provided, or the type of customer served. Each segment has one or more segment heads who report directly to the CEO. The CEO has final authority over resource allocation decisions and performance assessment. The business segments reflect this management structure and the manner in which financial information is currently evaluated by the CEO. Non-segment operations are classified as Other, which includes corporate functions, the Treasury function, the securities portfolio, wholesale funding activities, intangible assets, community development, non-core assets, and other unallocated assets, liabilities, capital, revenues, provision for credit losses and expenses.

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CITIZENS FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Reportable Segments

Segment results are determined based upon the Company’s management reporting system, which assigns balance sheet and income statement items to each of the business segments. The process is designed around the Company’s organizational and management structure and, accordingly, the results derived are not necessarily comparable with similar information published by other financial institutions. A description of each reportable segment and table of financial results is presented below:

Consumer Banking

The Consumer Banking segment focuses on retail customers and small businesses with annual revenues of up to $25 million. It offers traditional banking products and services, including checking, savings, home loans, student loans, credit cards, business loans and financial management services. It also operates an indirect auto financing business, providing financing for both new and used vehicles through auto dealerships. The segment’s distribution channels include a branch network, ATMs and a work force of experienced specialists ranging from financial consultants, mortgage loan officers and business banking officers to private bankers. Our Consumer Banking value proposition is based on providing simple, easy to understand product offerings and a convenient banking experience with a more personalized approach.

Commercial Banking

The Commercial Banking segment primarily targets companies with annual revenues from $25 million to $2.5 billion and provides a full complement of financial products and solutions, including loans, leases, trade financing, deposits, cash management, commercial cards, foreign exchange, interest rate risk management, corporate finance and capital markets advisory capabilities. It focuses on middle-market companies, large corporations and institutions and has dedicated teams with industry expertise in government banking, not-for-profit, healthcare, technology, professionals, oil & gas, asset finance, franchise finance, asset-based lending, commercial real estate, private equity and sponsor finance. While the segment’s business development efforts are predominantly focused in the Company’s footprint, some of its specialized industry businesses also operate selectively on a national basis (such as healthcare, asset finance and franchise finance). A key component of Commercial Banking’s growth strategy is to bring ideas to clients that help their businesses thrive, and in doing so, expand the loan portfolio and ancillary product sales.

Non-segment Operations

Other

In addition to non-segment operations, Other includes certain reconciling items in order to translate the segment results that are based on management accounting practices into consolidated results. For example, Other includes goodwill and any associated goodwill impairment charges.

	As of and for the Three Months Ended March 31, 2016
(in millions)	Consumer Banking		Commercial Banking		Other		Consolidated
Net interest income		$581		$300		$23		$904
Noninterest income	208		99		23		330
Total revenue	789		399		46		1,234
Noninterest expense	616		187		8		811
Profit before provision for credit losses	173		212		38		423
Provision for credit losses	63		9		19		91
Income before income tax expense	110		203		19		332
Income tax expense	39		70		—		109
Net income		$71		$133		$19		$223
Total average assets		$55,116		$45,304		$38,360		$138,780

52

CITIZENS FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

	As of and for the Three Months Ended March 31, 2015
(in millions)	Consumer Banking		Commercial Banking			Other			Consolidated
Net interest income		$533		$276			$27			$836
Noninterest income	219		100			28			347
Total revenue	752		376			55			1,183
Noninterest expense	596		173			41			810
Profit before provision for credit losses	156		203			14			373
Provision for credit losses	63		(21		)	16			58
Income (loss) before income tax expense (benefit)	93		224			(2		)	315
Income tax expense (benefit)	32		77			(3		)	106
Net income		$61		$147			$1			$209
Total average assets		$51,602		$41,606			$40,117			$133,325

Management accounting practices utilized by the Company as the basis for presentation for segment results include the following:

FTP adjustments

The Company utilizes an FTP system to eliminate the effect of interest rate risk from the segments’ net interest income because such risk is centrally managed within the Treasury function. The FTP system credits (or charges) the segments with the economic value of the funds created (or used) by the segments. The FTP system provides a funds credit for sources of funds and a funds charge for the use of funds by each segment. The sum of the interest income/expense and FTP charges/credits for each segment is its designated net interest income. The variance between the Company’s cumulative FTP charges and cumulative FTP credits is offset in Other.

Provision for credit losses allocations

Provision for credit losses is allocated to each business segment based on actual net charge-offs that have been recognized by the business segment. The difference between the consolidated provision for credit losses and the business segments’ net charge-offs is reflected in Other.

Income tax allocations

Income taxes are assessed to each line of business at a standard tax rate with the residual tax expense or benefit to arrive at the consolidated effective tax rate included in Other.

Expense allocations

Noninterest expenses incurred by centrally managed operations or business lines that directly support another business line’s operations are charged to the applicable business line based on its utilization of those services.

Goodwill

For impairment testing purposes, the Company allocates goodwill to its Consumer Banking and Commercial Banking reporting units. For management reporting purposes, the Company presents the goodwill balance (and any related impairment charges) in Other.

Substantially all revenues generated and long-lived assets held by the Company’s business segments are derived from clients that reside in the United States. Neither business segment earns revenue from a single external customer that represents 10 percent or more of the Company’s total revenues.

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CITIZENS FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 19 - EARNINGS PER SHARE

	Three Months Ended March 31,
(dollars in millions, except share and per-share data)	2016		2015
Numerator (basic and diluted):
Net income		$223		$209
Less: Preferred stock dividends	7		—
Net income available to common stockholders		$216		$209
Denominator:
Weighted-average common shares outstanding - basic	528,070,648		546,291,363
Dilutive common shares: share-based awards	2,375,540		3,507,354
Weighted-average common shares outstanding - diluted	530,446,188		549,798,717
Earnings per common share:
Basic		$0.41		$0.38
Diluted	0.41		0.38

Basic EPS is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding during each period. Diluted EPS is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding during each period, plus the effect of potential dilutive common shares such as share-based awards, using the treasury stock method. Potential dilutive common shares are excluded from the computation of diluted EPS in the periods where the effect would be antidilutive.

NOTE 20 - OTHER OPERATING EXPENSE

The following table presents the details of other operating expense:

	Three Months Ended March 31,
(in millions)	2016		2015
Deposit insurance		$26		$34
Promotional expense	24		22
Postage and delivery	12		12
Other	53		65
Other operating expense		$115		$133

NOTE 21 - SUBSEQUENT EVENTS

The Company has evaluated the impacts of events that have occurred subsequent to March 31, 2016 through the date the Consolidated Financial Statements were filed with the SEC. Based on this evaluation, the Company has determined none of these events were required to be recognized or disclosed in the Consolidated Financial Statements and related Notes, except as follows:

On April 5, 2016, CFG submitted its 2016 Capital Plan and the results of our company-run stress tests under a new annual submission timeline established by the Federal Reserve. We expect that on or before June 30, 2016, we will receive quantitative results of the Federal Reserve’s supervisory stress tests and their qualitative assessment of our capital planning policy and process, as well as the Federal Reserve’s object/non-object decisions regarding target capital actions for the quarterly periods September 30, 2016 through June 30, 2017.

On April 7, 2016, the Company completed a $348 million purchase of student loans under the agreement entered into on January 7, 2016, wherein the Company agreed to purchase student loans on a quarterly basis beginning with the first calendar quarter in 2016 and ending with the fourth calendar quarter in 2016.

On April 21, 2016, the Company announced a quarterly common stock dividend of $0.12 per share, or $64 million, payable on May 18, 2016 to stockholders of record at the close of business on May 4, 2016.

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CITIZENS FINANCIAL GROUP, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

	Page
Forward-Looking Statements	56
Selected Consolidated Financial Data	57
Overview	59
Recent Events	59
Key Factors Affecting Our Business	59
Factors Affecting Comparability of Our Results	62
Principal Components of Operations and Key Performance Metrics Used By Management	62
Results of Operations — Three Months Ended March 31, 2016 Compared with Three Months Ended March 31, 2015	68
Highlights	68
Net Income	69
Net Interest Income	70
Noninterest Income	71
Provision for Credit Losses	71
Noninterest Expense	72
Provision for Income Taxes	72
Business Segments	73
Analysis of Financial Condition — March 31, 2016 Compared with December 31, 2015	77
Loans and Leases	77
Non-Core Assets	78
Allowance for Credit Losses and Nonperforming Assets	78
Securities	81
Deposits	82
Borrowed Funds	82
Derivatives	85
Capital	86
Liquidity	91
Off-Balance Sheet Commitments	95
Critical Accounting Estimates	95
Risk Governance	100
Market Risk	104

55

CITIZENS FINANCIAL GROUP, INC.

FORWARD-LOOKING STATEMENTS

Forward-Looking Statements

This document contains forward-looking statements within the Private Securities Litigation Reform Act of 1995. Statements regarding potential future share repurchases and future dividends are forward-looking statements. Also, any statement that does not describe historical or current facts is a forward-looking statement. These statements often include the words “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “goals,” “targets,” “initiatives,” “potentially,” “probably,” “projects,” “outlook” or similar expressions or future conditional verbs such as “may,” “will,” “should,” “would,” and “could.”

Forward-looking statements are based upon the current beliefs and expectations of management, and on information currently available to management. Our statements speak as of the date hereof, and we do not assume any obligation to update these statements or to update the reasons why actual results could differ from those contained in such statements in light of new information or future events. We caution you, therefore, against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. While there is no assurance that any list of risks and uncertainties or risk factors is complete, important factors that could cause actual results to differ materially from those in the forward-looking statements include the following, without limitation:

• Negative economic conditions that adversely affect the general economy, housing prices, the job market, consumer confidence and spending habits which may affect, among other things, the level of nonperforming assets, charge-offs and provision expense;

• The rate of growth in the economy and employment levels, as well as general business and economic conditions;

• Our ability to implement our strategic plan, including the cost savings and efficiency components, and achieve our indicative performance targets;

• Our ability to remedy regulatory deficiencies and meet supervisory requirements and expectations;

• Liabilities and business restrictions resulting from litigation and regulatory investigations;

• Our capital and liquidity requirements (including under regulatory capital standards, such as the Basel III capital standards) and our ability to generate capital internally or raise capital on favorable terms;

• The effect of the current low interest rate environment or changes in interest rates on our net interest income, net interest margin and our mortgage originations, mortgage servicing rights and mortgages held for sale;

• Changes in interest rates and market liquidity, as well as the magnitude of such changes, which may reduce interest margins, impact funding sources and affect the ability to originate and distribute financial products in the primary and secondary markets;

• The effect of changes in the level of checking or savings account deposits on our funding costs and net interest margin;

• Financial services reform and other current, pending or future legislation or regulation that could have a negative effect on our revenue and businesses, including the Dodd-Frank Act and other legislation and regulation relating to bank products and services;

• A failure in or breach of our operational or security systems or infrastructure, or those of our third party vendors or other service providers, including as a result of cyber-attacks;

• Management’s ability to identify and manage these and other risks; and

• Any failure by us to successfully replicate or replace certain functions, systems and infrastructure provided by RBS.

In addition to the above factors, we also caution that the amount and timing of any future common stock dividends or share repurchases will depend on our financial condition, earnings, cash needs, regulatory constraints, capital requirements (including requirements of our subsidiaries), and any other factors that our Board of Directors deems relevant in making such a determination. Therefore, there can be no assurance that we will pay any dividends to holders of our common stock, or as to the amount of any such dividends.

More information about factors that could cause actual results to differ materially from those described in the forward-looking statements can be found under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2015.

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CITIZENS FINANCIAL GROUP, INC.

SELECTED CONSOLIDATED FINANCIAL DATA

Selected Consolidated Financial Data

We derived the summary Consolidated Operating Data for the three months ended March 31, 2016 and 2015 and the summary Consolidated Balance Sheet data as of March 31, 2016 from our unaudited interim Consolidated Financial Statements included in Part I, Item 1 — Financial Statements, included elsewhere in this report. Our historical results are not necessarily indicative of the results expected for any future period.

In our opinion, the unaudited interim Consolidated Financial Statements have been prepared on the same basis as the audited Consolidated Financial Statements and include all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the information set forth herein. Our operating results for the three months ended March 31, 2016 are not necessarily indicative of those to be expected for the year ending December 31, 2016 or for any future period. You should read the following selected consolidated financial data in conjunction with our unaudited interim Consolidated Financial Statements and the Notes thereto.

	Three Months Ended March 31,
(dollars in millions, except per share amounts)	2016			2015
OPERATING DATA:
Net interest income		$904			$836
Noninterest income	330			347
Total revenue	1,234			1,183
Provision for credit losses	91			58
Noninterest expense	811			810
Income before income tax expense	332			315
Income tax expense	109			106
Net income	223			209
Net income available to common stockholders	216			209
Net income per common share - basic	0.41			0.38
Net income per common share - diluted	0.41			0.38
OTHER OPERATING DATA:
Return on average common equity (2)	4.45		%	4.36		%
Return on average tangible common equity (1)	6.61			6.53
Return on average total assets (3)	0.65			0.63
Return on average total tangible assets (1)	0.68			0.67
Efficiency ratio (1)	65.66			68.49
Net interest margin (4)	2.86			2.77

57

CITIZENS FINANCIAL GROUP, INC.

SELECTED CONSOLIDATED FINANCIAL DATA

(in millions)	March 31, 2016			December 31, 2015
BALANCE SHEET DATA:
Total assets		$140,077			$138,208
Loans and leases (5)	100,991			99,042
Allowance for loan and lease losses	1,224			1,216
Total securities	24,057			24,075
Goodwill	6,876			6,876
Total liabilities	120,112			118,562
Total deposits	102,606			102,539
Federal funds purchased and securities sold under agreements to repurchase	714			802
Other short-term borrowed funds	3,300			2,630
Long-term borrowed funds	10,035			9,886
Total stockholders’ equity	19,965			19,646
OTHER BALANCE SHEET DATA:
Asset Quality Ratios:
Allowance for loan and lease losses as a percentage of total loans and leases	1.21		%	1.23		%
Allowance for loan and lease losses as a percentage of nonperforming loans and leases	113			115
Nonperforming loans and leases as a percentage of total loans and leases	1.07			1.07
Capital Ratios:(6)
CET1 capital ratio (7)	11.6			11.7
Tier 1 capital ratio (8)	11.9			12.0
Total capital ratio (9)	15.1			15.3
Tier 1 leverage ratio (10)	10.4			10.5

⁽¹⁾ These measures are non-GAAP financial measures. For more information on the computation of these non-GAAP financial measures, see “ —Principal Components of Operations and Key Performance Metrics Used By Management — Key Performance Metrics and Non-GAAP Financial Measures.”

⁽²⁾ “Return on average common equity” is defined as annualized net income available to common stockholders divided by average common equity.

⁽³⁾ “Return on average total assets” is defined as annualized net income divided by average total assets.

⁽⁴⁾ “Net interest margin” is defined as annualized net interest income divided by average total interest-earning assets.

⁽⁵⁾ Excludes loans held for sale of $751 million and $365 million as of March 31, 2016 and December 31, 2015, respectively.

⁽⁶⁾ Basel III transitional rules for institutions applying the Standardized approach to calculating risk-weighted assets became effective January 1, 2015. The capital ratios and associated components as of March 31, 2016 and December 31, 2015 are prepared using the Basel III Standardized transitional approach.

⁽⁷⁾ “Common equity tier 1 capital ratio” represents CET1 divided by total risk-weighted assets as defined under Basel III Standardized approach.

⁽⁸⁾ “Tier 1 capital ratio” is tier 1 capital, which includes CET1 capital plus non-cumulative perpetual preferred equity that qualifies as additional tier 1 capital, divided by total risk-weighted assets as defined under Basel III Standardized approach.

⁽⁹⁾ “Total capital ratio” is total capital divided by total risk-weighted assets as defined under Basel III Standardized approach.

⁽¹⁰⁾ “Tier 1 leverage ratio” is tier 1 capital divided by quarterly average total assets as defined under Basel III Standardized approach.

58

CITIZENS FINANCIAL GROUP, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS

Overview

We are one of the nation’s oldest and largest financial institutions, with $140.1 billion of total assets as of March 31, 2016. Headquartered in Providence, Rhode Island, we deliver a broad range of retail and commercial banking products and services to individuals, institutions and companies. Our approximately 17,900 colleagues strive to meet the financial needs of customers and prospects through approximately 1,200 branches and approximately 3,200 ATMs operated in 11 states in the New England, Mid-Atlantic and Midwest regions and through our online, telephone and mobile banking platforms. We conduct our banking operations through two wholly-owned banking subsidiaries, Citizens Bank, N.A. and Citizens Bank of Pennsylvania, and we operate our businesses through two operating segments, Consumer Banking and Commercial Banking.

Consumer Banking serves retail customers and small businesses with annual revenues of up to $25 million with products and services that include deposit products, mortgage and home equity lending, student loans, auto financing, credit cards, business loans and wealth management and investment services. Consumer Banking average loans and leases totaled $53.7 billion and $50.3 billion, or 53% of average loan and leases (including loans held for sale) in first quarter 2016 and 2015.

Commercial Banking offers corporate, institutional and not-for-profit clients a full range of wholesale banking products and services including lending and deposits, capital markets, treasury services, foreign exchange and interest hedging, leasing and asset finance, specialty finance and trade finance. Commercial Banking average loans and leases totaled $43.9 billion compared with $40.2 billion, or 44% and 43% of average loan and leases (including loans held for sale) in first quarter 2016 and 2015, respectively.

Non-core assets totaled $2.2 billion as of March 31, 2016 compared with $2.3 billion as of December 31, 2015. Non-core assets are primarily loans that are not aligned to our strategic priorities, generally as a result of geographic location, industry, product type, or risk level. We have actively managed these assets down since they were designated as non-core on June 30, 2009; this portfolio has decreased by an additional 7% as of March 31, 2016 compared to December 31, 2015. The largest component of our non-core portfolio is our home equity products serviced by others (a portion of which we now service internally). Our non-core assets are included in Other along with our treasury function, securities portfolio, wholesale funding activities, goodwill, community development assets and other unallocated assets, liabilities, capital, revenues, provision for credit losses and expenses not attributed to the Consumer Banking or Commercial Banking segments.

Recent Events

On March 7, 2016, we repurchased $125 million of our 4.023% subordinated notes due 2024 held by RBS. This transaction was in compliance with regulatory guidelines and supplemented our November 23, 2015 announcement that we had secured the ability to repurchase $500 million of subordinated notes held by RBS by July 30, 2016, subject to regulatory approval and ratings agency considerations.

Key Factors Affecting Our Business

Macro-economic conditions

Our business is affected by national and regional economic conditions, as well as the perception of future conditions and economic prospects. The significant macro-economic factors that impact our business include interest rates, the health of the housing market, the rate of the U.S.’s economic expansion, and unemployment levels.

The U.S. economy continued to expand at a slow pace, with real GDP rising by 0.5% in first quarter 2016, following 2.0% growth in 2015. Growth in household spending has declined since 2014 but the housing sector has improved with the three month average of existing home sales rising to 5.3 million units from 5.2 million units in fourth quarter 2015. Business fixed investment and net exports remained soft relative to 2015 levels.

The labor market continued to improve, with moderate job gains and lower levels of unemployment. The U.S. unemployment rate was 5.0% at both March 31, 2016 and December 31, 2015. Average monthly nonfarm employment increased by 215,000 in March 2016, after a revised increase of 262,000 in December 2015.

The FRB maintained very accommodative monetary policy conditions during first quarter 2016, notwithstanding the 25 bps rate increase in December, and continues to target a 0.25% to 0.50% federal funds rate range at the short end of the yield curve. Interest rates remain relatively low. See “—Interest rates” below for further discussion of the impact of interest rates on our results. Observable inflation levels remain below the FRB’s longer-term objective of 2.0%. Further labor market improvement and the dissipation of the effects of a decline in energy and import prices are expected to bring inflation closer to the FRB’s inflation objective.

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CITIZENS FINANCIAL GROUP, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS

Credit trends

Credit metrics and asset quality remained stable in first quarter 2016. Nonperforming loans of $1.1 billion as of March 31, 2016 decreased $57 million from March 31, 2015. Net charge-offs of $83 million in first quarter 2016increased$29 million from $54 million in first quarter 2015, which included $28 million in recoveries of prior period charge-offs. Annualized net charge-offs as a percentage of total average loans increased to 0.33% in first quarter 2016, which is consistent with the prior three quarters, compared to 0.23% in first quarter 2015.

Interest rates

Net interest income is our largest source of revenue and is the difference between the interest earned on interest-earning assets (usually loans and investment securities) and the interest expense incurred in connection with interest-bearing liabilities (usually deposits and borrowings). The level of net interest income is primarily a function of the average balance of interest-earning assets, the average balance of interest-bearing liabilities and the spread between the contractual yield on such assets and the contractual cost of such liabilities. These factors are influenced by the pricing and mix of interest-earning assets and interest-bearing liabilities which, in turn, are impacted by external factors such as local economic conditions, competition for loans and deposits, the monetary policy of the FRB and market interest rates. For further discussion, refer to “—Risk Governance” and “—Market Risk — Non-Trading Risk.”

The cost of our deposits and short-term wholesale borrowings is largely based on short-term interest rates, which are primarily driven by the FRB’s actions. However, the yields generated by our loans and securities are typically driven by both short-term and long-term interest rates, which are set by the market or, at times, by the FRB’s actions. The level of net interest income is therefore influenced by movements in such interest rates and the pace at which such movements occur. In 2015 and through first quarter 2016, short-term and long-term interest rates remained at very low levels by historical standards, with many benchmark rates, such as the federal funds rate and one- and three-month LIBOR, near zero. Further declines in the yield curve or a decline in longer-term yields relative to short-term yields (a flatter yield curve) would have an adverse impact on our net interest margin and net interest income.

In 2015 and through first quarter 2016, the FRB maintained a highly accommodative monetary policy, and indicated that this policy would remain in effect for a considerable time after its asset purchase program ended on October 29, 2014 and the economic recovery strengthens in the United States. More recently, the FRB has started to move down the path of interest rate normalization by raising the federal funds rate by 25 basis points. However, the FRB will likely continue to target a highly accommodative monetary policy for some time to come. As of March 31, 2016, the FRB had ended its asset purchases of Treasury securities and agency mortgage-backed securities. However, until further notice, the FRB will continue to re-invest run off from its $1.7 trillion mortgage-backed portfolio.

Regulatory trends

We are subject to extensive regulation and supervision, which continue to evolve as the legal and regulatory framework governing our operations continues to change. The current operating environment also has heightened regulatory expectations around many regulations including consumer compliance, the Bank Secrecy Act, anti-money laundering compliance, and increased internal audit activities. As a result of these heightened expectations, we expect to incur additional costs for additional compliance personnel and/or professional fees associated with advisors and consultants.

Dodd-Frank regulation

As described under “Regulation and Supervision” in Part I, Item 1 — Business included in our Annual Report on Form 10-K for the year ended December 31, 2015, we are subject to a variety of laws and regulations, including the Dodd-Frank Act. The Dodd-Frank Act is complex, and many aspects of the Dodd-Frank Act are subject to final rulemaking or phased implementation that will take effect over several years. The Dodd-Frank Act will continue to impact our earnings through fee reductions, higher costs and imposition of new restrictions on us. The Dodd-Frank Act may also continue to have a material adverse impact on the value of certain assets and liabilities held on our balance sheet. The ultimate impact of the Dodd-Frank Act on our business will depend on regulatory interpretation and rulemaking as well as the success of any of our actions to mitigate the negative impacts of certain provisions. Key parts of the Dodd-Frank Act that specifically impact our business are the repeal of a previous prohibition against payment of interest on demand deposits, which became effective in July 2011, and the introduction of a capital planning and stress-testing framework developed by the FRBG, known as CCAR and DFAST. The DFAST process projects net income, loan losses and capital ratios during a nine-quarter horizon under hypothetical, stressful macroeconomic and financial market scenarios developed by the FRBG as well as certain mandated assumptions about capital distributions prescribed in the DFAST rule.

In March and July of 2015 we published estimated impacts of stress, as required by applicable regulation processes, which may be accessed on our regulatory filings and disclosures page on http://investor.citizensbank.com. In 2016, we will publish required disclosures in June and October under a new regulatory timeline for such filings. Consistent with the purpose of these

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exercises and the assumptions used to assess our performance during hypothetical economic conditions, the projected results under the required stress scenarios show severe negative impacts on earnings. However, these pro forma results should not be interpreted to be management expectations in light of the current economic and operating environment. During March 2015, the Federal Reserve also published results from the latest supervisory stress tests performed for and by large bank holding companies supervised by the Federal Reserve (See FRB website). In 2016, the Federal Reserve is expected to publish results from the 2016 supervisory stress test performed for and by large bank holding companies supervised by the Federal Reserve in June. These tests are conducted and published by the FRB annually in fulfillment of CCAR and DFAST requirements.

Comprehensive Capital Analysis and Review

CCAR is an annual exercise by the FRBG to ensure that the largest bank holding companies have sufficient capital to continue operations throughout times of economic and financial stress and robust forward-looking capital planning processes that account for their unique risks.

As part of CCAR, the FRBG evaluates institutions’ capital adequacy, internal capital adequacy assessment processes and their plans to make capital distributions, such as dividend payments or stock repurchases. The FRBG may either object to our capital plan, in whole or in part, or provide a notice of non-objection. If the FRBG objects to our capital plan, we may not make any capital distribution other than those with respect to which the FRBG has indicated its non-objection.

In March 2015, the FRBG assessed our current capital plan as submitted and documented under the CCAR process and raised no objection to the plan. The maximum levels at which we may declare dividends and repurchase shares of our common stock through June 30, 2016 are governed by our 2015 capital plan, subject to actual financial performance and ongoing compliance with internal governance and all other regulatory requirements.

On April 5, 2016, CFG submitted its 2016 Capital Plan and the results of our company-run stress tests under a new annual submission timeline established by the Federal Reserve. We expect that on or before June 30, 2016, we will receive quantitative results of the Federal Reserve’s supervisory stress tests and of their qualitative assessment of our capital planning policy and process, as well as the Federal Reserve’s object / non-object decisions regarding target capital actions for the quarterly periods September 30, 2016 through June 30, 2017.

Repeal of the prohibition on depository institutions paying interest on demand deposits

We began offering interest-bearing corporate checking accounts after the 2011 repeal of the prohibition on depository institutions paying interest on demand deposits. Currently, industrywide interest rates for this product are very low and thus far the impact of the repeal has not had a significant effect on our results. However, market rates could increase more significantly in the future. If we need to pay higher interest rates on checking accounts to maintain current clients or attract new clients, our interest expense would increase, perhaps materially. Furthermore, if we fail to offer interest rates at a sufficient level to retain demand deposits, our core deposits may be reduced, which would require us to obtain funding in other ways or limit potential future asset growth.

Basel III final rules applicable to us and our banking subsidiaries

In July 2013, the FRB, OCC, and FDIC issued the U.S. Basel III final rules. The rules implement the Committee on Banking Supervision’s Basel III capital framework and certain provisions of the Dodd-Frank Act, including the Collins Amendment. The U.S. Basel III final rules substantially revised the risked-based capital and leverage requirements applicable to bank holding companies and their insured depository institution subsidiaries, including CBNA and CBPA. The U.S. Basel III final rules became effective for CFG and its depository institution subsidiaries, including CBNA and CBPA, on January 1, 2015 (subject to a phase-in period for certain provisions). In order to comply with the new capital requirements, we established internal capital ratio targets that meet or exceed U.S. regulatory expectations under fully phased-in Basel III rules, and increased our capital requirements in anticipation of the transition that is underway.

HELOC payment shock

Attention has been given by regulators, rating agencies, and the general press regarding the potential for increased exposure to credit losses associated with HELOCs that were originated during the period of rapid home price appreciation between 2003 and 2007. Industrywide, many of the HELOCs originated during this timeframe were structured with an extended interest-only payment period followed by a requirement to convert to a higher payment amount that would begin fully amortizing both principal and interest beginning at a certain date in the future. As of March 31, 2016, approximately 26% of our $14.9 billion HELOC portfolio, or $3.9 billion in drawn balances were subject to a payment reset or balloon payment between April 1, 2016 and December 31, 2018, including $71 million in balloon balances where full payment is due at the end of a ten-year interest only draw period.

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To help manage this exposure, in September 2013, we launched a comprehensive program designed to provide heightened customer outreach to inform, educate and assist customers through the reset process as well as to offer alternative financing and forbearance options. Results of this program indicate that our efforts to assist customers at risk of default have successfully reduced delinquency and charge-off rates compared to our original expectations.

As of March 31, 2016, for the $1.6 billion of our HELOC portfolio that was originally structured with a reset period in 2014 and 2013, 94% of the balances were refinanced, paid off or were current on payments, 3% were past due and 3% had been charged off. As of March 31, 2016, for the $1.3 billion in balances originally structured with a reset period in 2015, 94% of the balances were refinanced, paid off or were current on payments, 5% were past due and 2% had been charged off. A total of $995 million in balances were originally structured with a reset period in 2016, with $659 million scheduled to reset for the remainder of 2016. Factors that affect our future expectations for charge-off risk for the portion of our HELOC portfolio subject to reset periods in the future include improved loan-to-value ratios resulting from continued home price appreciation, stable portfolio credit score profiles and more robust loss mitigation efforts.

Factors Affecting Comparability of Our Results

Investment in our business

We regularly incur expenses associated with investments in our infrastructure. For example, from 2011 to 2015 we invested $1.3 billion in infrastructure and technology, and plan to invest a total of $245 million in 2016 and about $164 million in 2017. We invested $47 million in our infrastructure in the first three months of 2016. These investments, which are designed to lower our operating costs and improve our customer experience, include significant programs to enhance our resiliency, upgrade customer-facing technology and streamline operations. Recent significant investments included the 2013 launch of our new teller system, new commercial loan platform and new auto loan platform and the 2013 upgrade of the majority of our ATM network, including equipping more than 1,450 ATMs with advanced deposit-taking functionality as well as additional investment in our Treasury Solutions platform in 2014. In the third quarter of 2015 we enhanced our data resiliency via a new back up data center and began rolling out a new mortgage platform. We expect that these investments will increase our long-term overall efficiency and add to our capacity to increase revenue.

Principal Components of Operations and Key Performance Metrics Used by Management

As a banking institution, we manage and evaluate various aspects of our results of operations and our financial condition. We evaluate the levels and trends of the line items included in our balance sheet and statement of operations, as well as various financial ratios that are commonly used in our industry. We analyze these ratios and financial trends against our own historical performance, our budgeted performance and the financial condition and performance of comparable banking institutions in our region and nationally.

The primary line items we use in our key performance metrics to manage and evaluate our statement of operations include net interest income, noninterest income, total revenue, provision for credit losses, noninterest expense and net income. The primary line items we use in our key performance metrics to manage and evaluate our balance sheet data include loans and leases, securities, allowance for credit losses, deposits, borrowed funds and derivatives.

Net interest income

Net interest income is the difference between the interest earned on interest-earning assets (usually loans and investment securities) and the interest expense incurred in connection with interest-bearing liabilities (usually deposits and borrowings). The level of net interest income is primarily a function of the average balance of interest-earning assets, the average balance of interest-bearing liabilities and the spread between the contractual yield on such assets and the cost of such liabilities. Net interest income is impacted by the relative mix of interest-earning assets and interest-bearing liabilities, movements in market interest rates, levels of nonperforming assets and pricing pressure from competitors. The mix of interest-earning assets is influenced by loan demand and by management’s continual assessment of the rate of return and relative risk associated with various classes of interest-earning assets.

The mix of interest-bearing liabilities is influenced by management’s assessment of the need for lower cost funding sources weighed against relationships with customers and growth requirements and is impacted by competition for deposits in our market and the availability and pricing of other sources of funds.

Noninterest income

The primary components of our noninterest income are service charges and fees, card fees, trust and investment services fees and mortgage banking fees.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

Total revenue

Total revenue is the sum of our net interest income and our noninterest income.

Provision for credit losses

The provision for credit losses is the amount of expense that, based on our judgment, is required to maintain the allowance for credit losses at an amount that reflects probable losses inherent in the loan portfolio at the balance sheet date and that, in management’s judgment, is appropriate under relevant accounting guidance. The provision for credit losses includes the provision for loan and lease losses as well as the provision for unfunded commitments. The determination of the amount of the allowance for credit losses is complex and involves a high degree of judgment and subjectivity. For additional information regarding the provision for credit losses, see “—Critical Accounting Estimates — Allowance for Credit Losses,” Note 1 “Significant Accounting Policies” to the audited Consolidated Financial Statements in the Annual Report on Form 10-K for the year ended December 31, 2015 and Note 4 “Allowance for Credit Losses, Nonperforming Assets, and Concentrations of Credit Risk” to our unaudited interim Consolidated Financial Statements in Part I, Item 1 — Financial Statements, included elsewhere in this report.

Noninterest expense

Noninterest expense includes salaries and employee benefits, outside services, occupancy expense, equipment expense, amortization of software, goodwill impairment, and other operating expenses.

Net income

We evaluate our net income based on measures including return on average common equity, return on average total assets and return on average tangible common equity.

Loans and leases

We classify our loans and leases pursuant to the following classes: commercial, commercial real estate, leases, residential mortgages, home equity loans, home equity lines of credit, home equity loans serviced by others, home equity lines of credit serviced by others, automobile, student, credit cards and other retail.

Loans are reported at the amount of their outstanding principal, net of charge-offs, unearned income, deferred loan origination fees and costs and unamortized premiums or discounts (on purchased loans). Deferred loan origination fees and costs and purchase discounts and premiums are amortized as an adjustment of yield over the life of the loan, using the level yield interest method. Unamortized amounts remaining upon prepayment or sale are recorded as interest income or gain (loss) on sale, respectively. Credit card receivables include billed and uncollected interest and fees.

Leases are classified at the inception of the lease by type. Lease receivables, including leveraged leases, are reported at the aggregate of lease payments receivable and estimated residual values, net of unearned and deferred income, including unamortized investment credits. Lease residual values are reviewed at least annually for other-than-temporary impairment, with valuation adjustments recognized currently against noninterest income. Leveraged leases are reported net of non-recourse debt. Unearned income is recognized to yield a level rate of return on the net investment in the leases.

Mortgage loans and commercial loans held for sale are carried at fair value.

Securities

Our securities portfolio is managed to seek return while maintaining prudent levels of quality, market risk and liquidity. Investments in debt and equity securities are carried in four portfolios: AFS, HTM, trading securities and other investment securities. We determine the appropriate classification at the time of purchase. Securities in our AFS portfolio will be held for indefinite periods of time and may be sold in response to changes in interest rates, changes in prepayment risk or other factors relevant to our asset and liability strategy. Securities in our AFS portfolio are carried at fair value, with unrealized gains and losses reported in OCI, as a separate component of stockholders’ equity, net of taxes. Securities are classified as HTM because we have the ability and intent to hold the securities to maturity, and securities in our HTM portfolio are carried at amortized cost. Other investment securities are composed mainly of FHLB stock and FRB stock (which are carried at cost), and money market mutual fund investments held by the Company’s broker-dealer (which are carried at fair value, with changes in fair value recognized in noninterest income).

Allowance for credit losses

Our estimate of probable losses in the loan and lease portfolios is recorded in the ALLL and the reserve for unfunded lending commitments. Together these are referred to as the allowance for credit losses. We evaluate the adequacy of the allowance for credit losses using the following ratios: ALLL as a percentage of total loans and leases; ALLL as a percentage of nonperforming loans and leases; and nonperforming loans and leases as a percentage of total loans and leases. For additional information, see “—Critical Accounting Estimates — Allowance for Credit Losses,” and Note 1 “Significant Accounting Policies” to the audited

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Consolidated Financial Statements in the Annual Report on Form 10-K for the year ended December 31, 2015 and Note 4 “Allowance for Credit Losses, Nonperforming Assets, and Concentrations of Credit Risk” to our unaudited interim Consolidated Financial Statements in Part I, Item 1 — Financial Statements, included elsewhere in this report.

Deposits

Our deposits include: on demand checking, checking with interest, regular savings accounts, money market accounts and term deposits.

Borrowed funds

As of March 31, 2016, our total short-term borrowed funds included federal funds purchased, securities sold under agreement to repurchase, the current portion of FHLB advances and other short-term borrowed funds. As of March 31, 2016, our long-term borrowed funds included subordinated debt, unsecured notes, Federal Home loan advances and other long-term borrowed funds. For additional information, see “—Analysis of Financial Condition — Borrowed Funds,” and Note 7 “Borrowed Funds” to our unaudited interim Consolidated Financial Statements in Part I, Item 1 — Financial Statements, included elsewhere in this report.

Derivatives

We use pay-fixed swaps to lengthen liabilities synthetically and offset duration in fixed-rate assets. We also use pay-fixed swaps to hedge floating-rate wholesale funding.

We use receive-fixed interest rate swaps to manage the interest rate exposure on our medium term borrowings. We also use receive-fixed swaps to minimize the exposure to variability in the interest cash flows on our floating rate assets. The assets and liabilities recorded for derivatives designated as hedges reflect the market value of these hedge instruments.

We sell interest rate swaps and foreign exchange forwards to commercial customers. Offsetting swap and forward agreements are simultaneously transacted to minimize our market risk associated with the customer derivative contracts. The assets and liabilities recorded for derivatives not designated as hedges reflect the market value of these transactions. For additional information, see “—Analysis of Financial Condition — Derivatives,” and Note 11 “Derivatives” to our unaudited interim Consolidated Financial Statements in Part I, Item 1 — Financial Statements, included elsewhere in this report.

Key performance metrics and non-GAAP financial measures

We consider various measures when evaluating our performance and making day-to-day operating decisions, as well as evaluating capital utilization and adequacy, including:

• Return on average common equity, which we define as net income available to common stockholders divided by average common equity;

• Return on average tangible common equity, which we define as net income available to common stockholders divided by average common equity excluding average goodwill (net of related deferred tax liability) and average other intangibles;

• Return on average total assets, which we define as net income divided by average total assets;

• Return on average total tangible assets, which we define as net income divided by average total assets excluding average goodwill (net of related deferred tax liability) and average other intangibles;

• Efficiency ratio, which we define as the ratio of our total noninterest expense to the sum of net interest income and total noninterest income. We measure our efficiency ratio to evaluate the efficiency of our operations as it helps us monitor how costs are changing compared to our income. A decrease in our efficiency ratio represents improvement; and

• Net interest margin, which we calculate by dividing annualized net interest income for the period by average total interest-earning assets, is a key measure that we use to evaluate our net interest income.

Certain of the above financial measures, including return on average tangible common equity, return on average total tangible assets and the efficiency ratio are not recognized under GAAP. In addition, we present net income, net income available to common stockholders, and return on average tangible common equity, and efficiency ratio net of goodwill impairment restructuring charges and special items. We believe these non-GAAP measures provide useful information to investors because these are among the measures used by our management team to evaluate our operating performance and make day-to-day operating decisions. In addition, we believe restructuring charges and special items in any period do not reflect the operational performance of the business in that period and, accordingly, it is useful to consider these line items with and without restructuring charges and special items. We believe this presentation also increases comparability of period-to-period results.

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CITIZENS FINANCIAL GROUP, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS

We consider pro forma capital ratios defined by banking regulators but not effective at each period end to be non-GAAP financial measures. As analysts and banking regulators may evaluate our capital adequacy using these pro forma ratios, we believe they are useful to provide investors the ability to evaluate our capital adequacy on the same basis.

Other companies may use similarly titled non-GAAP financial measures that are calculated differently from the way we calculate such measures. Accordingly, our non-GAAP financial measures may not be comparable to similar measures used by other companies. We caution investors not to place undue reliance on such non-GAAP measures, but instead to consider them with the most directly comparable GAAP measure. Non-GAAP financial measures have limitations as analytical tools, and should not be considered in isolation or as a substitute for our results reported under GAAP.

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CITIZENS FINANCIAL GROUP, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS

The following table reconciles non-GAAP financial measures to GAAP:

		As of and for the Three Months Ended March 31,
(dollars in millions, except per-share amounts)	Ref.	2016			2015
Net income (GAAP)	A		$223			$209
Net income available to common stockholders (GAAP)	B		$216			$209
Return on average tangible common equity
Average common equity (GAAP)			$19,567			$19,407
Less: Average goodwill (GAAP)		6,876			6,876
Less: Average other intangibles (GAAP)		3			5
Add: Average deferred tax liabilities related to goodwill (GAAP)		481			422
Average tangible common equity (non-GAAP)	C		$13,169			$12,948
Return on average tangible common equity (non-GAAP)	B/C	6.61		%	6.53		%
Return on average total tangible assets:
Average total assets (GAAP)			$138,780			$133,325
Less: Average goodwill (GAAP)		6,876			6,876
Less: Average other intangibles (GAAP)		3			5
Add: Average deferred tax liabilities related to goodwill (GAAP)		481			422
Average tangible assets (non-GAAP)	D		$132,382			$126,866
Return on average total tangible assets (non-GAAP)	A/D	0.68		%	0.67		%
Efficiency ratio
Noninterest expense (GAAP)	E		$811			$810
Net interest income (GAAP)			$904			$836
Noninterest income (GAAP)		330			347
Total revenue (GAAP)	F		$1,234			$1,183
Efficiency ratio (non-GAAP)	E/F	65.66		%	68.49		%
Noninterest expense excluding restructuring charges and special items:
Noninterest expense (GAAP)	E		$811			$810
Less: Restructuring charges (GAAP)		—			1
Less: Special items (1)		—			9
Noninterest expense, excluding restructuring charges and special items (non-GAAP)			$811			$800
Net income, excluding restructuring charges and special items:
Net income (GAAP)	A		$223			$209
Add: Restructuring charges (GAAP)		—			1
Add: Special Items (1)		—			5
Net income, excluding restructuring charges and special items (non-GAAP)			$223			$215
Net income available to common stockholders, excluding restructuring charges and special items:
Net income available to common stockholders (GAAP)	B		$216			$209
Add: Restructuring charges (GAAP)		—			1
Add: Special Items (1)		—			5
Net income available to common shareholders, excluding restructuring charges and special items (non-GAAP)	G		$216			$215
Return on average tangible common equity, excluding restructuring charges and special items (non-GAAP)	G/C	6.61		%	6.73		%

⁽¹⁾ Special items include the following: regulatory charges, separation items and IPO related expenses.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

		As of and for the Three Months Ended March 31,
		2016											2015
(dollars in millions)	Ref.	Consumer Banking			Commercial Banking			Other		Consolidated			Consumer Banking			Commercial Banking			Other		Consolidated
Net income (GAAP)	H		$71			$133			$19		$223			$61			$147			$1		$209
Less: Preferred stock dividends		—			—			7		7			—			—			—		—
Net income available to common stockholders (GAAP)	I		$71			$133			$12		$216			$61			$147			$1		$209
Efficiency ratio:
Total revenue (GAAP)	J		$789			$399			$46		$1,234			$752			$376			$55		$1,183
Noninterest expense (GAAP)	K		$616			$187			$8		$811			$596			$173			$41		$810
Efficiency ratio (non-GAAP)	K/J	78.08		%	46.74		%	NM		65.66		%	79.25		%	46.01		%	NM		68.49		%
Return on average total tangible assets:
Average total assets (GAAP)			$55,116			$45,304			$38,360		$138,780			$51,602			$41,606			$40,117		$133,325
Less: Average goodwill (GAAP)		—			—			6,876		6,876			—			—			6,876		6,876
Less: Average other intangibles (GAAP)		—			—			3		3			—			—			5		5
Add: Average deferred tax liabilities related to goodwill (GAAP)		—			—			481		481			—			—			422		422
Average total tangible assets (non-GAAP)	L		$55,116			$45,304			$31,962		$132,382			$51,602			$41,606			$33,658		$126,866
Return on average total tangible assets (non-GAAP)	H/L	0.52		%	1.18		%	NM		0.68		%	0.48		%	1.43		%	NM		0.67		%
Return on average tangible common equity:
Average common equity (GAAP)(2)			$5,089			$4,790			$9,688		$19,567			$4,649			$4,526			$10,232		$19,407
Less: Average goodwill (GAAP)		—			—			6,876		6,876			—			—			6,876		6,876
Less: Average other intangibles (GAAP)		—			—			3		3			—			—			5		5
Add: Average deferred tax liabilities related to goodwill (GAAP)		—			—			481		481			—			—			422		422
Average tangible common equity (non-GAAP)(2)	M		$5,089			$4,790			$3,290		$13,169			$4,649			$4,526			$3,773		$12,948
Return on average tangible common equity (non-GAAP)(2)	I/M	5.59		%	11.19		%	NM		6.61		%	5.30		%	13.15		%	NM		6.53		%

⁽²⁾ Operating segments are allocated capital on a risk-adjusted basis considering economic and regulatory capital requirements. We approximate that regulatory capital is equivalent to a sustainable target level for common equity tier 1 and then allocate that approximation to the segments based on economic capital.

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CITIZENS FINANCIAL GROUP, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS

Results of Operations — Three Months Ended March 31, 2016 Compared with Three Months Ended March 31, 2015

Highlights

For first quarter 2016:

• Net income of $223 million in first quarter increased $14 million, compared to $209 million in first quarter 2015. No restructuring charges and special items were recorded in first quarter 2016 compared with $6 million in after-tax restructuring charges and special noninterest expense items in first quarter 2015;

• Net income available to common stockholders of $216 million increased $7 million, or 3%, compared to $209 million in first quarter 2015, despite the impact of a $7 million semi-annual preferred stock dividend recorded in first quarter 2016;

• Net interest income of $904 million increased $68 million, or 8%, from $836 million in first quarter 2015 reflecting 7% average loan growth and net interest margin improvement;

• Net interest margin of 2.86% in first quarter 2016 increased 9 basis points, compared to 2.77% in first quarter 2015, driven by improved loan yields, higher interest rates and continued improvement in loan mix. Results also reflected the benefit of modest balance sheet deleveraging, a reduction related to a FRB stock dividend decrease and the impact of higher funding costs;

• Noninterest income of $330 million in first quarter 2016 decreased $17 million, or 5%, compared to $347 million in first quarter 2015 and reflected a $7 million decrease related to a card reward accounting change. Lower mortgage banking fees, other income, card and foreign exchange and letter of credit fees were partially offset by an increase in service charges and trust and investment services fees;

• Noninterest expense of $811 million remained stable as a $10 million decrease in restructuring charges and special items was offset by increases in outside services, salaries and employee benefits, amortization and equipment expense. Excluding the restructuring charges and special items, noninterest expense increased $11 million as higher outside services, salary and employee benefits expense, and amortization and equipment expense were partially offset by lower other expense;

• Provision for credit losses of $91 million in first quarter 2016, increased $33 million, or 57%, from $58 million in first quarter of 2015, which included $28 million in commercial loan recoveries. The benefit of a reserve release related to the transfer of $373 million of TDR balances to held for sale and lower retail charge-offs was more than offset by additional reserves related to the oil and gas portfolio following the Shared National Credit review. First quarter 2016 results include an $8 million reserve build, compared with a $4 million reserve build in first quarter 2015;

• Return on average tangible common equity ratio of 6.61%⁽¹⁾ compared to 6.53%⁽¹⁾ in first quarter 2015.

• Average loans and leases of $100.3 billion increased $6.3 billion, or 7%, from $94.0 billion in first quarter 2015 reflecting a $3.5 billion increase in commercial and a $2.8 billion increase in retail;

• Average interest-bearing deposits of $74.8 billion increased $4.9 billion, or 7%, from $69.9 billion in first quarter 2015, driven by growth in all deposit products;

• Net charge-offs of $83 million increased $29 million, or 54%, from $54 million in first quarter 2015, largely as a result of higher commercial loan recoveries in the earlier period. The ALLL of $1.2 billion increased $8 million compared to fourth quarter 2015. ALLL to total loans and leases was 1.21% as of March 31, 2016, compared with 1.23% as of December 31, 2015. ALLL to non-performing loans and leases ratio was 113% as of March 31, 2016, compared with 115% as of December 31, 2015; and

• Net income per average common share, basic and diluted, was $0.41 in first quarter 2016, up 8%, from $0.38 per average common share, basic and diluted, in first quarter 2015.

⁽¹⁾ These measures are non-GAAP financial measures. For more information on the computation of these non-GAAP financial measures, see “—Principal Components of Operations and Key Performance Metrics Used By Management — Key Performance Metrics and Non-GAAP Financial Measures.”

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MANAGEMENT’S DISCUSSION AND ANALYSIS

Net Income

Net income totaled $223 million in first quarter 2016, up $14 million, or 7%, from $209 million in first quarter 2015. First quarter 2015 results were reduced by $6 million of after-tax restructuring charges and special items, largely related to efforts to improve processes and enhance efficiencies, as well as rebranding and separating from RBS. Excluding the restructuring charges and special items, net income increased $8 million from first quarter 2015.

The following table details the significant components of our net income for the periods indicated:

	Three Months Ended March 31
(dollars in millions)	2016			2015			Change			Percent
Operating Data:
Net interest income		$904			$836			$68		8%
Noninterest income	330			347			(17		)	(5)
Total revenue	1,234			1,183			51			4
Provision for credit losses	91			58			33			57
Noninterest expense	811			810			1			—
Noninterest expense, excluding restructuring charges and special items (1)	811			800			11			1
Income before income tax expense	332			315			17			5
Income tax expense	109			106			3			3
Net income	223			209			14			7
Net income, excluding restructuring charges and special items (1)	223			215			8			4
Net income available to common stockholders	216			209			7			3
Net income available to common stockholders, excluding restructuring charges and special items (1)	216			215			1			—
Return on average tangible common equity (1)	6.61		%	6.53		%	8		bps	—
Return on average tangible common equity, excluding restructuring charges and special items (1)	6.61		%	6.73		%	(12		) bps	—

⁽¹⁾ These are non-GAAP financial measures. For more information on the computation of this non-GAAP financial measure, see “—Principal Components of Operations and Key Performance Metrics Used By Management — Key Performance Metrics and Non-GAAP Financial Measures.”

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Net Interest Income

The following table shows the major components of net interest income and net interest margin:

	Three Months Ended March 31,
	2016							2015							Change
(dollars in millions)	Average Balances			Income/ Expense		Yields/ Rates		Average Balances			Income/ Expense		Yields/ Rates		Average Balances			Yields/ Rates
Assets
Interest-bearing cash and due from banks and deposits in banks		$1,675			$2	0.42	%		$2,092			$1	0.19	%		($417	)	23 bps
Taxable investment securities	23,864			145		2.43		24,955			159		2.55		(1,091		)	(12)
Non-taxable investment securities	9			—		2.60		10			—		2.60		(1		)	—
Total investment securities	23,873			145		2.43		24,965			159		2.55		(1,092		)	(12)
Commercial	34,018			264		3.08		31,911			226		2.84		2,107			24
Commercial real estate	9,108			62		2.69		7,700			50		2.59		1,408			10
Leases	3,917			24		2.44		3,895			25		2.53		22			(9)
Total commercial	47,043			350		2.95		43,506			301		2.77		3,537			18
Residential mortgages	13,465			126		3.76		11,855			112		3.79		1,610			(3)
Home equity loans	2,471			34		5.51		3,332			44		5.40		(861		)	11
Home equity lines of credit	14,632			113		3.11		15,310			111		2.94		(678		)	17
Home equity loans serviced by others (1)	958			17		6.94		1,193			21		7.09		(235		)	(15)
Home equity lines of credit serviced by others (1)	340			2		2.19		522			3		2.58		(182		)	(39)
Automobile	13,792			97		2.83		12,933			89		2.78		859			5
Student	4,852			60		5.02		2,623			33		5.13		2,229			(11)
Credit cards	1,601			45		11.29		1,637			45		11.10		(36		)	19
Other retail	1,108			24		8.66		1,041			20		7.59		67			107
Total retail	53,219			518		3.91		50,446			478		3.83		2,773			8
Total loans and leases	100,262			868		3.46		93,952			779		3.34		6,310			12
Loans held for sale, at fair value	306			3		3.70		242			2		3.29		64			41
Other loans held for sale	49			1		6.64		91			1		6.85		(42		)	(21)
Interest-earning assets	126,165			1,019		3.23		121,342			942		3.12		4,823			11
Allowance for loan and lease losses	(1,212		)					(1,192		)					(20		)
Goodwill	6,876							6,876							—
Other noninterest-earning assets	6,951							6,299							652
Total noninterest-earning assets	12,615							11,983							632
Total assets		$138,780							$133,325							$5,455
Liabilities and Stockholders’ Equity
Checking with interest		$17,993			$7	0.14	%		$16,039			$4	0.11	%		$1,954		3 bps
Money market and savings	44,619			29		0.26		41,666			25		0.25		2,953			1
Term deposits	12,199			24		0.80		12,184			23		0.78		15			2
Total interest-bearing deposits	74,811			60		0.32		69,889			52		0.31		4,922			1
Federal funds purchased and securities sold under agreements to repurchase (2)	881			1		0.23		4,607			7		0.60		(3,726		)	(37)
Other short-term borrowed funds	3,098			11		1.40		6,969			15		0.83		(3,871		)	57
Long-term borrowed funds	9,894			43		1.75		3,930			32		3.27		5,964			(152)
Total borrowed funds	13,873			55		1.58		15,506			54		1.38		(1,633		)	20
Total interest-bearing liabilities	88,684			115		0.52		85,395			106		0.50		3,289			2
Demand deposits	27,170							25,756							1,414
Other liabilities	3,112							2,767							345
Total liabilities	118,966							113,918							5,048
Stockholders’ equity	19,814							19,407							407
Total liabilities and stockholders’ equity		$138,780							$133,325							$5,455
Interest rate spread						2.71							2.62					9
Net interest income					$904							$836
Net interest margin						2.86	%						2.77	%				9 bps
Memo: Total deposits (interest-bearing and demand)		$101,981			$60	0.24	%		$95,645			$52	0.22	%		$6,336		2 bps

⁽¹⁾ Our SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others. We now service a portion of this portfolio internally.

⁽²⁾ Balances are net of certain short-term receivables associated with reverse repurchase agreements. Interest expense includes the full cost of the repurchase agreements and certain hedging costs. The rate on federal funds purchased is elevated due to the impact from pay-fixed interest rate swaps that are scheduled to run off by the end of 2017. See “—Analysis of Financial Condition — March 31, 2016 Compared with December 31, 2015 — Derivatives” for further information.

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Net interest income of $904 million in first quarter 2016 increased $68 million, or 8%, compared to $836 million in first quarter 2015, reflecting 7% average loan growth and a nine basis point improvement in net interest margin.

Compared to first quarter 2015, average interest-earning assets of $126.2 billion increased $4.8 billion, or 4%, from first quarter 2015, driven by a $3.5 billion increase in average commercial loans and leases and a $2.8 billion increase in average retail loans, partially offset by a $1.5 billion decrease in average investments and interest-bearing deposits, largely cash. Commercial loan growth was driven by strength in commercial and commercial real estate. Retail loan growth was driven by strength in student, residential mortgage, and auto loan balances.

Average deposits of $102.0 billion increased $6.3 billion from first quarter 2015 with particular strength in savings, checking with interest and demand deposits. Total interest-bearing deposit costs of $60 million increased $8 million, or 15%, from $52 million in first quarter 2015 and reflected a one basis point increase in interest-bearing deposit costs to 0.32%. Checking with interest costs of 0.14% in 2016 compared with 0.11% in 2015, term deposit costs increased to 0.80% in 2016 from 0.78% in 2015, and money market account and savings account costs increased to 0.26% from 0.25% in 2015.

Total borrowed funds of $13.9 billion decreased $1.6 billion from first quarter 2015 as continued growth in deposits reduced the need for borrowings. Total borrowed funds costs in first quarter 2016 of $55 million remained stable with 2015.

Net interest margin of 2.86% in first quarter 2016 increased nine basis points compared to 2.77% in first quarter 2015 driven by improved loan yields reflecting both higher interest rates and continued improvement in loan mix. Results also reflected the benefit of modest balance sheet deleveraging, as well as lower FRB stock dividends and higher funding costs. Average interest-earning asset yields in first quarter of 3.23% increased 11 basis points from 3.12% for the same period in 2015.

Noninterest Income

The following table details the significant components of our noninterest income:

	Three Months Ended March 31,
(dollars in millions)	2016		2015		Change			Percent
Service charges and fees		$144		$135		$9		7	%
Card fees	50		52		(2		)	(4	)
Trust and investment services fees	37		36		1			3
Capital markets fees	22		22		—			—
Foreign exchange and letter of credit fees	21		23		(2		)	(9	)
Mortgage banking fees	18		33		(15		)	(45	)
Bank-owned life insurance income	13		12		1			8
Securities gains, net	9		8		1			13
Other income (1)	16		26		(10		)	(38	)
Noninterest income		$330		$347		($17	)	(5	%)

⁽¹⁾ Includes net securities impairment losses on securities available for sale recognized in earnings and other income.

Noninterest income of $330 million in first quarter 2016 decreased$17 million, or 5%, compared to $347 million in first quarter 2015 and included a $7 million decrease related to a card reward accounting change. Lower mortgage banking fees, other income, card and foreign exchange and letter of credit fees were partially offset by increases in service charges and trust and investment services fees. Service charges increased$9 million driven by consumer checking account growth and an increase in commercial cash management and commitment fees. Trust and investment services fees were up slightly. Mortgage banking fees decreased $15 million from first quarter 2015 levels, which included higher loan sale gains, as well as the impact of a decrease in mortgage servicing rights valuation and a lower level of conforming applications. Other income declined $10 million, reflecting lower leasing income partially offset by higher interest-rate product fees.

Provision for Credit Losses

Provision for credit losses of $91 million in first quarter 2016 increased$33 million, or 57%, from $58 million in first quarter 2015, which included $28 million in commercial recoveries of prior period charge-offs. 2016 results also reflected the benefit of a reserve release related to the transfer of $373 million of TDR balances to held for sale, and lower retail charge-offs which were more than offset by additional reserves related to the oil and gas portfolio following the Shared National Credit review. First quarter 2016 results included an $8 million reserve build, compared with a $4 million reserve build in first quarter 2015.

The provision for loan and lease losses is the result of a detailed analysis performed to estimate an appropriate and adequate ALLL. The total provision for credit losses included the provision for loan and lease losses as well as the provision for unfunded

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commitments. Refer to “—Analysis of Financial Condition — Allowance for Credit Losses and Nonperforming Assets” for more information.

Noninterest Expense

The following table displays the significant components of our noninterest expense for the periods indicated:

	Three Months Ended March 31,
(dollars in millions)	2016		2015		Change			Percent
Salaries and employee benefits		$425		$419		$6		1	%
Outside services	91		79		12			15
Occupancy	76		80		(4		)	(5	)
Equipment expense	65		63		2			3
Amortization of software	39		36		3			8
Other operating expense	115		133		(18		)	(14	)
Noninterest expense		$811		$810		$1		—	%

Noninterest expense of $811 million in first quarter 2016 remained relatively stable compared to first quarter 2015 as the impact of higher outside services, salaries and employee benefits, amortization, and equipment expense was offset by lower other operating expenses, which included a $7 million decrease related to a card reward accounting change. First quarter 2015 results also reflected $10 million of pre-tax restructuring charges and special items. Excluding the impact of the restructuring charges and special items, noninterest expense increased $11 million.

Provision for Income Taxes

The provision for income taxes was $109 million and $106 million for the three months ended March 31, 2016 and 2015, respectively. This resulted in an effective tax rate of 32.9% and 33.7% in first quarter 2016 and 2015, respectively. The decrease in the effective rate from 2015 to 2016 was primarily attributable to an increase in tax advantaged investing.

At March 31, 2016, we reported a net deferred tax liability of $852 million, compared to a $730 million liability at December 31, 2015. The increase in the net deferred tax liability was primarily attributable to the tax effect of net unrealized gains on securities and derivatives arising during the period. For further discussion, see Note 10 “Income Taxes” to our unaudited interim Consolidated Financial Statements in Part I, Item 1 — Financial Statements, included elsewhere in this report.

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Business Segments

The following tables present certain financial data of our business segments:

	As of and for the Three Months Ended March 31, 2016
(dollars in millions)	Consumer Banking			Commercial Banking			Other		(6)	Consolidated
Net interest income		$581			$300			$23			$904
Noninterest income	208			99			23			330
Total revenue	789			399			46			1,234
Noninterest expense	616			187			8			811
Profit before provision for credit losses	173			212			38			423
Provision for credit losses	63			9			19			91
Income before income tax expense	110			203			19			332
Income tax expense	39			70			—			109
Net income		$71			$133			$19			$223
Loans and leases and loans held for sale (period-end) (1)		$53,731			$44,812			$3,199			$101,742
Average Balances:
Total assets		$55,116			$45,304			$38,360			$138,780
Loans and leases and loans held for sale (1)	53,744			43,899			2,974			100,617
Deposits	70,871			24,833			6,277			101,981
Interest-earning assets	53,793			43,987			28,385			126,165
Key Metrics
Net interest margin (2)	4.35		%	2.74		%	NM			2.86		%
Efficiency ratio (3)	78.08			46.74			NM			65.66
Average loans to average deposits ratio (4)	75.83			176.78			NM			98.66
Return on average total tangible assets (2) (3)	0.52			1.18			NM			0.68
Return on average tangible common equity (2) (3) (5)	5.59			11.19			NM			6.61

⁽¹⁾ Includes loans and leases held for sale.

⁽²⁾ Ratios for the periods ended March 31, 2016 and 2015 are presented on an annualized basis.

⁽³⁾  These are non-GAAP financial measures. For more information on the computation of these non-GAAP financial measures, see “—Principal Components of Operations and Key Performance Metrics Used By Management — Key Performance Metrics and Non-GAAP Financial Measures.”

⁽⁴⁾ Ratios include loans and leases held for sale.

⁽⁵⁾  Operating segments are allocated capital on a risk-adjusted basis considering economic and regulatory capital requirements. We approximate that regulatory capital is equivalent to a sustainable target level for CET1 and then allocate that approximation to the segments based on economic capital.

⁽⁶⁾ Includes the financial impact of non-core, liquidating loan portfolios and other non-core assets, our treasury activities, wholesale funding activities, securities portfolio, community development assets and other unallocated assets, liabilities, capital, revenues, provision for credit losses and expenses not attributed to our Consumer Banking or Commercial Banking segments. For a description of non-core assets, see “—Analysis of Financial Condition — March 31, 2016 Compared with December 31, 2015 — Loans and Leases-Non-Core Assets.”

We operate our business through two operating segments: Consumer Banking and Commercial Banking. Segment results are derived from our business-line profitability reporting systems by specifically attributing managed assets, liabilities, capital and their related revenues, provision for credit losses and expenses. Residual assets, liabilities, capital and their related revenues, provision for credit losses and expenses are attributed to Other.

Other includes our treasury function, securities portfolio, wholesale funding activities, goodwill and goodwill impairment, community development assets and other unallocated assets, liabilities, capital, revenues, provision for credit losses and expenses not attributed to Consumer Banking or Commercial Banking. Other also includes our non-core assets. Non-core assets are primarily loans inconsistent with our strategic goals, generally as a result of geographic location, industry, product type or risk level. The non-core portfolio totaled $2.2 billion as of March 31, 2016, down 7% from December 31, 2015. The largest component of our non-core portfolio is our home equity products currently or formerly serviced by others portfolio.

Our capital levels are evaluated and managed centrally, however, capital is allocated to the operating segments to support evaluation of business performance. Operating segments are allocated capital on a risk-adjusted basis considering economic and regulatory capital requirements. We approximate that regulatory capital is equivalent to a sustainable target level for common equity tier 1 and then allocate that approximation to the segments based on economic capital. Interest income and expense is determined based on the assets and liabilities managed by the business segment. Because funding and asset liability management is a central function, funds transfer-pricing methodologies are utilized to allocate a cost of funds used, or credit for the funds provided, to all business segment assets, liabilities and capital, respectively, using a matched-funding concept. The residual effect on net interest income of asset/liability management, including the residual net interest income related to the funds transfer pricing process, is included in Other.

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Provision for credit losses is allocated to each business segment based on actual net charge-offs that have been recognized by the business segment. The difference between the consolidated provision for credit losses and the business segments’ net charge-offs is reflected in Other.

Noninterest income and expense directly managed by each business segment, including fees, service charges, salaries and benefits, and other direct revenues and costs are accounted for within each segment’s financial results in a manner similar to our unaudited interim Consolidated Financial Statements. Occupancy costs are allocated based on utilization of facilities by the business segment. Noninterest expenses incurred by centrally managed operations or business segments that directly support another business segment’s operations are charged to the applicable business segment based on its utilization of those services.

Income taxes are assessed to each business segment at a standard tax rate with the residual tax expense or benefit to arrive at the consolidated effective tax rate included in Other.

Developing and applying methodologies used to allocate items among the business segments is a dynamic process. Accordingly, financial results may be revised periodically as management systems are enhanced, methods of evaluating performance or product lines change, or our organizational structure changes.

Consumer Banking

	As of and for the Three Months Ended March 31,
(dollars in millions)	2016			2015			Change			Percent
Net interest income		$581			$533			$48		9	%
Noninterest income	208			219			(11		)	(5	)
Total revenue	789			752			37			5
Noninterest expense	616			596			20			3
Profit before provision for credit losses	173			156			17			11
Provision for credit losses	63			63			—			—
Income before income tax expense	110			93			17			18
Income tax expense	39			32			7			22
Net income		$71			$61			$10		16
Loans and leases and loans held for sale (period-end) (1)		$53,731			$50,532			$3,199		6
Average Balances:
Total assets		$55,116			$51,602			$3,514		7
Loans and leases and loans held for sale (1)	53,744			50,260			3,484			7
Deposits	70,871			67,518			3,353			5
Interest-earning assets	53,793			50,294			3,499			7	%
Key Metrics
Net interest margin (2)	4.35		%	4.30		%	5 bps			—
Efficiency ratio (3)	78.08			79.25			(117) bps			—
Average loans to average deposits ratio (4)	75.83			74.44			139 bps			—
Return on average total tangible assets (2) (3)	0.52			0.48			4 bps			—
Return on average tangible common equity (2) (3) (5)	5.59			5.30			29 bps			—

⁽¹⁾ Includes loans and leases held for sale.

⁽²⁾  Ratios for the periods ended March 31, 2016 and 2015 are presented on an annualized basis.

⁽³⁾  These are non-GAAP financial measures. For more information on the computation of these non-GAAP financial measures, see “—Principal Components of Operations and Key Performance Metrics Used By Management — Key Performance Metrics and Non-GAAP Financial Measures.”

⁽⁴⁾ Ratios include loans and leases held for sale.

⁽⁵⁾  Operating segments are allocated capital on a risk-adjusted basis considering economic and regulatory capital requirements. We approximate that regulatory capital is equivalent to a sustainable target level for CET1 and then allocate that approximation to the segments based on economic capital.

Consumer Banking net income of $71 million for first quarter 2016 increased $10 million, or 16%, from $61 million in first quarter 2015, as the benefit of a $37 million increase in revenue was partially offset by a $20 million increase in noninterest expense.

Net interest income of $581 million increased 9% from first quarter 2015, driven by growth in student, mortgage and auto loans, improved loan yields which reflected the benefit of higher rates and improved mix as well as the benefit of growth in lower cost deposits.

Noninterest income decreased $11 million, or 5%, driven by a $15 million decrease in mortgage banking income from first quarter 2015 levels which included higher loan sale gains and a reduction in mortgage servicing rights valuation as well as

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lower secondary volume and gain on sale spreads. Results also reflected higher service charges and fees, driven by consumer checking account growth, an increase in trust and investment services fees and a reduction in card fees driven by a $7 million decrease tied to a card reward accounting change.

Noninterest expense of $616 millionincreased$20 million, or 3%, from $596 million in first quarter 2015, driven by higher salaries and employee benefits, outside services and equipment expense, partially offset by the effect of the card reward accounting change, lower insurance and tax expense, and lower credit collection costs.

Provision for credit losses of $63 million was stable with first quarter 2015 as higher net charge-offs in auto and student were offset by lower home equity net charge-offs.

Commercial Banking

	As of and for the Three Months Ended March 31,
(dollars in millions)	2016			2015			Change			Percent
Net interest income		$300			$276			$24		9	%
Noninterest income	99			100			(1		)	(1	)
Total revenue	399			376			23			6
Noninterest expense	187			173			14			8
Profit before provision for credit losses	212			203			9			4
Provision for credit losses	9			(21		)	30			143
Income before income tax expense	203			224			(21		)	(9	)
Income tax expense	70			77			(7		)	(9	)
Net income		$133			$147			($14	)	(10	)
Loans and leases and loans held for sale (period-end) (1)		$44,812			$40,642			$4,170		10
Average Balances:
Total assets		$45,304			$41,606			$3,698		9
Loans and leases and loans held for sale (1)	43,899			40,241			3,658			9
Deposits	24,833			21,932			2,901			13
Interest-earning assets	43,987			40,344			3,643			9
Key Metrics
Net interest margin (2)	2.74		%	2.77		%	(3) bps			—
Efficiency ratio (3)	46.74			46.01			73 bps			—
Average loans to average deposits ratio (4)	176.78			183.48			(670) bps			—
Return on average total tangible assets (2)(3)	1.18			1.43			(25) bps			—
Return on average tangible common equity (2) (3) (5)	11.19			13.15			(196) bps			—

⁽¹⁾ Includes loans and leases held for sale.

⁽²⁾  Ratios for the periods ended March 31, 2016 and 2015 are presented on an annualized basis.

⁽³⁾  These are non-GAAP financial measures. For more information on the computation of these non-GAAP financial measures, see “—Principal Components of Operations and Key Performance Metrics Used By Management — Key Performance Metrics and Non-GAAP Financial Measures.”

⁽⁴⁾ Ratios include loans and leases held for sale.

⁽⁵⁾  Operating segments are allocated capital on a risk-adjusted basis considering economic and regulatory capital requirements. We approximate that regulatory capital is equivalent to a sustainable target level for CET1 and then allocate that approximation to the segments based on economic capital.

Commercial Banking net income of $133 million in first quarter 2016 declined$14 million, or 10%, from $147 million in first quarter 2015, as the benefit of a $23 million increase in total revenue was more than offset by a $14 million increase in noninterest expense and $30 million increase in provision for credit losses.

Net interest income of $300 millionincreased$24 million, or 9%, from $276 million in first quarter 2015, reflecting a $3.7 billion increase in average loans and leases and improved spreads driven by higher interest rates, as well as deposit growth.

Noninterest income of $99 million remained relatively stable with first quarter 2015, as strength in service charges and fees was offset by lower leasing income and foreign exchange and letter of credit fees.

Noninterest expense of $187 millionincreased $14 million, or 8%, from $173 million in first quarter 2015, reflecting increased outside services, salaries and employee benefits, and equipment expense partially offset by lower insurance and regulatory costs.

Provision for credit losses of $9 million increased $30 million from first quarter 2015 levels that included $21 million in recoveries of prior period charge-offs.

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Other

	As of and for the Three Months Ended March 31,
(dollars in millions)	2016		2015			Change			Percent
Net interest income		$23		$27			($4	)	(15	%)
Noninterest income	23		28			(5		)	(18	)
Total revenue	46		55			(9		)	(16	)
Noninterest expense	8		41			(33		)	(80	)
Profit before provision for credit losses	38		14			24			171
Provision for credit losses	19		16			3			19
Income (loss) before income tax expense (benefit)	19		(2		)	21			NM
Income tax expense (benefit)	—		(3		)	3			(100	)
Net income		$19		$1			$18		NM
Loans and leases and loans held for sale (period-end) (1)		$3,199		$3,696			($497	)	(13	)
Average Balances:
Total assets		$38,360		$40,117			($1,757	)	(4	)
Loans and leases and loans held for sale (1)	2,974		3,784			(810		)	(21	)
Deposits	6,277		6,195			82			1
Interest-earning assets	28,385		30,704			(2,319		)	(8	)

⁽¹⁾ Includes loans and leases held for sale.

Other net income of $19 million increased from $1 million in first quarter 2015, as lower incentive compensation, insurance expense, restructuring charges and special items and favorable residual funds transfer pricing benefits were offset by the impact of a reduction in FRB stock dividends, higher wholesale funding costs and an increase in provision expense, which reflected an $8 million reserve build compared to a $4 million reserve build in first quarter 2015.

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Analysis of Financial Condition — March 31, 2016 Compared with December 31, 2015

Loans and Leases

The following table shows the composition of loans and leases, including non-core loans, as of:

(dollars in millions)	March 31, 2016		December 31, 2015		Change			Percent
Commercial		$34,671		$33,264		$1,407		4	%
Commercial real estate	9,406		8,971		435			5
Leases	3,895		3,979		(84		)	(2	)
Total commercial	47,972		46,214		1,758			4
Residential mortgages	13,345		13,318		27			—
Home equity loans	2,313		2,557		(244		)	(10	)
Home equity lines of credit	14,526		14,674		(148		)	(1	)
Home equity loans serviced by others (1)	930		986		(56		)	(6	)
Home equity lines of credit serviced by others (1)	339		389		(50		)	(13	)
Automobile	13,847		13,828		19			—
Student	5,006		4,359		647			15
Credit cards	1,581		1,634		(53		)	(3	)
Other retail	1,132		1,083		49			5
Total retail	53,019		52,828		191			—
Total loans and leases (2) (3)		$100,991		$99,042		$1,949		2	%

⁽¹⁾ Our SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others. We now service a portion of this portfolio internally.

⁽²⁾ Excluded from the table above are loans held for sale totaling $751 million and $365 million as of March 31, 2016 and December 31, 2015, respectively.

⁽³⁾ Mortgage loans serviced for others by our subsidiaries are not included above, and amounted to $17.4 billion and $17.6 billion at March 31, 2016 and December 31, 2015, respectively.

Our loans and leases are disclosed in portfolio segments and classes. Our loan and lease portfolio segments are commercial and retail. The classes of loans and leases are: commercial, commercial real estate, leases, residential mortgages, home equity loans, home equity lines of credit, home equity loans serviced by others, home equity lines of credit serviced by others, automobile, student, credit cards and other retail.

Total loans and leases of $101.0 billion as of March 31, 2016, increased$1.9 billion, or 2%, from $99.0 billion as of December 31, 2015, reflecting growth in commercial products. Total commercial loans and leases of $48.0 billiongrew$1.8 billion, or 4%, from $46.2 billion as of December 31, 2015, reflecting commercial loan growth of $1.4 billion and commercial real estate loan growth of $435 million. Total retail loans of $53.0 billion remained relatively stable with December 31, 2015 levels, as a $647 millionincrease in student was partially offset by lower home equity balances, including continued run off in the non-core portfolio. During first quarter 2016, we purchased $369 million of student loans but transferred $288 million of residential mortgages and $85 million of home equity loans, classified as TDRs, to other loans held for sale.

The effect of first quarter 2016 loan purchases and sales, net of runoff of previously purchased loans, decreased period-end loans by $570 million. See Note 3 “Loans and Leases” to our unaudited interim Consolidated Financial Statements in Part I, Item 1 — Financial Statements, included elsewhere in this report, for further information.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

Non-Core Assets    

The table below shows the composition of our non-core assets as of the dates indicated:

(dollars in millions)	March 31, 2016		December 31, 2015		(Date of Designation) June 30, 2009		Change from 2016-2015		Change from 2016-2009
Commercial		$37		$38		$1,900	(3	%)	(98	%)
Commercial real estate	116		130		3,412		(11	)	(97	)
Total commercial	153		168		5,312		(9	)	(97	)
Residential mortgages	282		297		1,467		(5	)	(81	)
Home equity loans	65		69		384		(6	)	(83	)
Home equity lines of credit	70		74		231		(5	)	(70	)
Home equity loans serviced by others (1)	930		986		4,591		(6	)	(80	)
Home equity lines of credit serviced by others (1)	339		389		1,589		(13	)	(79	)
Automobile	—		—		769		—		(100	)
Student	321		329		1,495		(2	)	(79	)
Credit cards	—		—		995		—		(100	)
Other retail	—		—		3,268		—		(100	)
Total retail	2,007		2,144		14,789		(6	)	(86	)
Total non-core loans	2,160		2,312		20,101		(7	)	(89	)
Other assets	25		26		378		(4	)	(93	)
Total non-core assets		$2,185		$2,338		$20,479	(7	%)	(89	%)

⁽¹⁾ Our SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others. We now service a portion of this portfolio internally.

Non-core assets are primarily loans inconsistent with our strategic goals, generally as a result of geographic location, industry, product type or risk level. Non-core assets totaled $2.2 billion as of March 31, 2016. We have actively managed these loans down since they were designated as non-core on June 30, 2009. Between that time and March 31, 2016, the portfolio decreased$18.3 billion or 89%, including principal repayments of $10.3 billion; charge-offs of $3.9 billion; transfers back to the core portfolio of $2.8 billion; and sales of $1.3 billion.

Non-core assets totaled $2.2 billion as of March 31, 2016, a decrease of $153 million from December 31, 2015, driven by principal repayments of $143 million. Commercial non-core loans of $153 million declined9% compared to December 31, 2015. Retail non-core loan balances of $2.0 billiondecreased$137 million, or 6%, compared to December 31, 2015.

The largest component of our non-core portfolio is the home equity SBO portfolio. The SBO portfolio is a liquidating portfolio consisting of pools of home equity loans and lines of credit purchased between 2003 and 2007. Although our SBO portfolio consists of loans that were initially serviced by others, we now service a portion of this portfolio internally. SBO balances serviced externally totaled $695 million and $763 million as of March 31, 2016 and December 31, 2015, respectively. The SBO portfolio has been closed to new purchases since the third quarter of 2007, with exposure down to $1.3 billion as of March 31, 2016, compared to $1.4 billion as of December 31, 2015. The SBO portfolio represented 4% of the retail real estate secured portfolio and 2% of the overall retail loan portfolio as of March 31, 2016.

The credit profile of the SBO portfolio was weaker than the core real estate portfolio, with a weighted-average refreshed FICO score of 711 and CLTV of 89% as of March 31, 2016. The proportion of the portfolio in a second lien position was 96% with 72% of the portfolio in out-of-footprint geographies including 27% in California, Nevada, Arizona and Florida.

SBO net charge-offs of $7 million remained relatively stable with fourth quarter 2015 levels. The SBO portfolio annualized net charge-off rate increased 19 basis points to 2.05%, compared to 1.86% in fourth quarter 2015, driven by balance liquidation.

Allowance for Credit Losses and Nonperforming Assets

We and our banking subsidiaries, CBNA and CBPA, maintain an allowance for credit losses, consisting of an ALLL and a reserve for unfunded lending commitments. This allowance is created through charges to income, or provision for credit losses, and is maintained at an appropriate level adequate to absorb anticipated losses and is determined in accordance with GAAP. For further information on our processes to determine our allowance for credit losses, see “—Critical Accounting Estimates — Allowance for Credit Losses,” Note 1 “Significant Accounting Policies” to the audited Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2015 and Note 4 “Allowance for Credit Losses, Nonperforming

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Assets, and Concentrations of Credit Risk” to our unaudited interim Consolidated Financial Statements in Part I, Item 1 — Financial Statements, included elsewhere in this report.

The allowance for credit losses totaled $1.3 billion at March 31, 2016 and December 31, 2015. Our ALLL was 1.21% of total loans and leases and 113% of nonperforming loans and leases as of March 31, 2016 compared with 1.23% and 115%, respectively, as of December 31, 2015.

Overall, loan portfolio credit quality remained relatively stable in first quarter 2016. Net charge-offs of $83 millionincreased$29 million from $54 million in first quarter 2015, which included $28 million of commercial recoveries of prior period charge-offs. Annualized net charge-offs increased to 0.33% of average total loans and leases from 0.23% in first quarter 2015. The 90 day or more past due delinquency rate was 1.0% as of March 31, 2016 compared with 0.9% as of December 31, 2015. Nonperforming loans and leases totaled $1.1 billion, or 1.07%, of the total portfolio as of March 31, 2016 and December 31, 2015.

On March 31, 2016 we transferred $373 million of first lien consumer real-estate secured TDRs to other loans held for sale. This portfolio included $97 million of nonperforming loans.

Commercial Loan Asset Quality

Our commercial loan and lease portfolio consists of traditional commercial loans, commercial real estate loans and leases. The portfolio is predominantly focused on customers in our footprint and adjacent states in which we have a physical presence where our local delivery model provides for strong client connectivity. However, we also do business in certain specialized industry sectors on a national basis.

For commercial loans and leases, we use regulatory classification ratings to monitor credit quality. Loans with a “pass” rating are those that we believe will be fully repaid in accordance with the contractual loan terms. Commercial loans and leases that are “criticized” are those that have some weakness that indicates an increased probability of future loss. See Note 4 “Allowance for Credit Losses, Nonperforming Assets, and Concentrations of Credit Risk” to our unaudited interim Consolidated Financial Statements in Part I, Item 1 — Financial Statements, included elsewhere in this report.

As of March 31, 2016, nonperforming commercial loans and leases increased$222 million to $370 million, compared to $148 million as of December 31, 2015, driven by a $210 million increase in nonperforming oil and gas industry loans following new negative guidance related to multi-tiered debt structures. As of March 31, 2016, total commercial nonperforming loans stood at 0.8% of the commercial loan portfolio, compared to 0.3% as of December 31, 2015. Total commercial loan and lease portfolio charge-offs in first quarter 2016 of $9 million compared to a net recovery of $22 million in first quarter 2015.

Commercial criticized loans and leases portfolio increased to $2.8 billion, or 5.8% of the portfolio compared to $2.6 billion, or 5.6% at December 31, 2015. Commercial criticized balances increased to $2.1 billion, or 6.1%, of commercial loans compared to $2.0 billion, or 6.0%, as of December 31, 2015, driven by a $175 million increase in the oil and gas portfolio. Commercial real estate criticized balances of $542 million, or 5.8%, of the commercial real estate portfolio compared to $521 million, or 5.8%, as of December 31, 2015. Commercial criticized loans to total criticized loans of 76% as of March 31, 2016 remained stable with December 31, 2015 levels. Commercial real estate accounted for 20% of criticized loans as of March 31, 2016 and December 31, 2015.

Retail Loan Asset Quality

For retail loans, we primarily use the loan’s payment and delinquency status to monitor credit quality. The longer a loan is past due, the greater the likelihood of future credit loss. These credit quality indicators are continually updated and monitored. Our retail loan portfolio remains focused on lending across the New England, Mid-Atlantic and Midwest regions, with continued geographic expansion outside the footprint primarily in the auto finance and student lending portfolios. Retail assets increased $191 million to $53.0 billion as of March 31, 2016, a 0.4%increase from December 31, 2015, driven by growth in the student lending and residential mortgage portfolios, offset by a reduction in home equity.

The credit composition of our retail loan portfolio at March 31, 2016 remained favorable and well-positioned across all product lines with an average refreshed FICO score of 757, which was stable with December 31, 2015 levels. The real estate secured portfolio CLTV ratio is calculated as the mortgage and second lien loan balance divided by the appraised value of the property and was 63% as of March 31, 2016 compared to 64% as of December 31, 2015. Excluding the SBO portfolio, the real estate CLTV was 61% as of March 31, 2016 compared to 62% as of December 31, 2015. Retail asset quality continued to improve with an annualized net charge-off rate (core and non-core) of 0.55% in first quarter 2016, a decrease of five basis points from first quarter 2015.

Nonperforming retail loans as a percentage of total retail loans were 1.3% as of March 31, 2016, a 40 basis point decrease from December 31, 2015, driven primarily by the transfer of $97 million of non-performing retail TDRs to held for sale and the reclassification of $77 million in residential mortgage loans guaranteed by government entities to performing in keeping with industry practice.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

Special Topics-HELOC Payment Shock

For further information regarding the possible HELOC payment shock, see “—Key Factors Affecting Our Business — HELOC Payment Shock.”

Troubled Debt Restructuring

TDR is the classification given to a loan that has been restructured in a manner that grants a concession to a borrower that is experiencing financial hardship that we would not otherwise make. TDRs typically result from our loss mitigation efforts and are undertaken in order to improve the likelihood of recovery and continuity of the relationship. Our loan modifications are handled on a case by case basis and are negotiated to achieve mutually agreeable terms that maximize loan collectability and meet our borrower’s financial needs. The types of concessions include interest rate reductions, term extensions, principal forgiveness and other modifications to the structure of the loan that fall outside our lending policy. Depending on the specific facts and circumstances of the customer, restructuring can involve loans moving to nonaccrual, remaining on nonaccrual or continuing on accrual status.As of March 31, 2016, $775 million of retail loans were classified as retail TDRs, compared with $1.2 billion as of December 31, 2015. The reduction in TDRs was driven by the transfer of $373 million of first lien mortgages and home equity loans to held for sale. In the retail TDR population, $244 million were in nonaccrual status of which 62% were current in payment. TDRs generally return to accrual status once repayment capacity and appropriate payment history can be established. TDRs are evaluated for impairment individually. Loans are classified as TDRs until paid off, sold or refinanced at market terms.

For additional information regarding TDRs, see “—Critical Accounting Estimates — Allowance for Credit Losses,” and Note 1 “Significant Accounting Policies” to the audited Consolidated Financial Statements in the Annual Report on Form 10-K for the year ended December 31, 2015 and Note 4 “Allowance for Credit Losses, Nonperforming Assets, and Concentrations of Credit Risk” to our unaudited interim Consolidated Financial Statements in Part I, Item 1 — Financial Statements, included elsewhere in this report.

The table below presents an aging of our retail TDRs:

	March 31, 2016
(in millions)	Current		30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Total
Recorded Investment:
Residential mortgages		$96	12			$1		$37		$146
Home equity loans	110		8		2		19		139
Home equity lines of credit	163		8		2		17		190
Home equity loans serviced by others (1)	64		3		—		3		70
Home equity lines of credit serviced by others (1)	7		—		—		3		10
Automobile	13		—		1		—		14
Student	159		2		2		1		164
Credit cards	25		1		—		1		27
Other retail	14		1		—		—		15
Total		$651		$35		$8		$81		$775

⁽¹⁾ Our SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others. We now service a portion of this portfolio internally.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

The table below presents the accrual status of our retail TDRs:

	March 31, 2016
(in millions)	Accruing		Nonaccruing		Total
Recorded Investment:
Residential mortgages		$74		$72		$146
Home equity loans	101		38		139
Home equity lines of credit	118		72		190
Home equity loans serviced by others (1)	50		20		70
Home equity lines of credit serviced by others (1)	4		6		10
Automobile	8		6		14
Student	135		29		164
Credit cards	26		1		27
Other retail	15		—		15
Total		$531		$244		$775

⁽¹⁾ Our SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others. We now service a portion of this portfolio internally.

Securities

Our securities portfolio is managed to seek return while maintaining prudent levels of credit quality, market risk and liquidity. The following table presents our securities AFS and HTM:

	March 31, 2016				December 31, 2015
(dollars in millions)	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Change in Fair Value
Securities Available for Sale:
U.S. Treasury		$16		$16		$16		$16		$—		—	%
State and political subdivisions	9		9		9		9		—			—
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	17,147		17,434		17,234		17,320		114			1
Other/non-agency	526		488		555		522		(34		)	(7	)
Total mortgage-backed securities	17,673		17,922		17,789		17,842		80			—
Total debt securities	17,698		17,947		17,814		17,867		80			—
Marketable equity securities	5		5		5		5		—			—
Other equity securities	12		12		12		12		—			—
Total equity securities	17		17		17		17		—			—
Total securities available for sale		$17,715		$17,964		$17,831		$17,884		$80		—
Securities Held to Maturity:
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities		$4,010		$4,103		$4,105		$4,121		($18	)	—
Other/non-agency	1,119		1,158		1,153		1,176		(18		)	(2	)
Total securities held to maturity		$5,129		$5,261		$5,258		$5,297		($36	)	(1	)
Total securities available for sale and held to maturity		$22,844		$23,225		$23,089		$23,181		$44		—	%

As of March 31, 2016, the fair value of the AFS and HTM securities portfolio increased $44 million to $23.2 billion, compared with $23.2 billion as of December 31, 2015, driven by an increase in the market value of the securities portfolio due to a decline in interest rates, which was partially offset by cash flow runoff in excess of reinvestment. During first quarter 2016, $364 million in mortgage-backed securities were sold and the proceeds were reinvested into higher coupon securities for risk management purposes. As of March 31, 2016, the portfolio’s average effective duration was 2.9 years compared with 3.5 years as of December 31, 2015, largely reflective of increased prepayment speeds.

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CITIZENS FINANCIAL GROUP, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS

The securities portfolio included high quality, highly liquid investments reflecting our ongoing commitment to maintaining appropriate contingent liquidity and pledging capacity. U.S. government-guaranteed notes and government-sponsored entity-issued mortgage-backed securities represented the vast majority of the securities portfolio holdings. The portfolio composition has also been dominated by holdings backed by mortgages so that they may be pledged to the FHLBs. This has become increasingly important due to the enhanced liquidity requirements of the liquidity coverage ratio. For further discussion of the liquidity coverage ratios, see “Regulation and Supervision — Liquidity Standards” in Part I — Business, included in the Annual Report on Form 10-K for the year ended December 31, 2015.

Income on debt securities portfolios totaled $139 million for the three months endedMarch 31, 2016, a decrease of $9 million, or 6%, from $148 million for the three months endedMarch 31, 2015, and reflected a yield of 2.43% compared with 2.47% for the three months endedMarch 31, 2015.

Deposits

The table below represents the major components of our deposits:

(dollars in millions)	March 31, 2016		December 31, 2015		Change			Percent
Demand		$27,186		$27,649		($463	)	(2	%)
Checking with interest	18,706		17,921		785			4
Regular savings	8,748		8,218		530			6
Money market accounts	35,513		36,727		(1,214		)	(3	)
Term deposits	12,453		12,024		429			4
Total deposits		$102,606		$102,539		$67		—	%

Total deposits as of March 31, 2016, increased$67 million to $102.6 billion, compared to $102.5 billion as growth in checking with interest, savings and term deposits were partially offset by a decrease in money market and demand deposits.

Borrowed Funds

Short-term borrowed funds

The following is a summary of our short-term borrowed funds:

(dollars in millions)	March 31, 2016		December 31, 2015		Change			Percent
Federal funds purchased		$23		$—		$23		100	%
Securities sold under agreements to repurchase	691		802		(111		)	(14	)
Other short-term borrowed funds (primarily current portion of FHLB advances)	3,300		2,630		670			25
Total short-term borrowed funds		$4,014		$3,432		$582		17	%

Short-term borrowed funds of $4.0 billion as of March 31, 2016, increased $582 million from December 31, 2015, reflecting an increase of $670 million in short-term FHLB advances and other short-term borrowings and an increase of 23 million in short-term federal funds purchased, offset by a decline of $111 million in customer repurchase agreements.

    As of March 31, 2016, our total contingent liquidity was $21.9 billion, consisting of $1.0 billion in net cash at the FRB (which is defined as excess cash balances held at the FRBs), $17.4 billion in unencumbered high-quality securities, and $3.5 billion in unused FHLB borrowing capacity. Additionally, $10.7 billion in unencumbered loans pledged at the FRBs created total available liquidity of approximately $32.6 billion.

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CITIZENS FINANCIAL GROUP, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS

Key data related to short-term borrowed funds is presented in the following table:

(dollars in millions)	As of and for the Three Months Ended March 31, 2016			As of and for the Year Ended Dec. 31, 2015			As of and for the Three Months Ended March 31, 2015
Weighted-average interest rate at period-end:
Federal funds purchased and securities sold under agreements to repurchase	0.01		%	0.15		%	0.22		%
Other short-term borrowed funds (primarily current portion of FHLB advances)	0.57			0.44			0.26
Maximum amount outstanding at month-end during the period:
Federal funds purchased and securities sold under agreements to repurchase		$1,274			$5,375			$5,375
Other short-term borrowed funds (primarily current portion of FHLB advances)	3,300			7,004			7,004
Average amount outstanding during the period:
Federal funds purchased and securities sold under agreements to repurchase		$881			$3,364			$4,607
Other short-term borrowed funds (primarily current portion of FHLB advances)	3,098			5,865			6,969
Weighted-average interest rate during the period:
Federal funds purchased and securities sold under agreements to repurchase	0.06		%	0.22		%	0.18		%
Other short-term borrowed funds (primarily current portion of FHLB advances)	0.58			0.28			0.26

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MANAGEMENT’S DISCUSSION AND ANALYSIS

Long-term borrowed funds

The following is a summary of our long-term borrowed funds:

(in millions)	March 31, 2016		December 31, 2015
Citizens Financial Group, Inc.:
4.150% fixed rate subordinated debt, due 2022 (1)		$347		$350
5.158% fixed-to-floating rate subordinated debt, (LIBOR + 3.56%) callable, due 2023 (2)	333		333
3.750% fixed rate subordinated debt, due 2024 (2) (3)	250		250
4.023% fixed rate subordinated debt, due 2024 (2) (4)	214		331
4.082% fixed rate subordinated debt, due 2025 (2) (5)	346		331
4.350% fixed rate subordinated debt, due 2025 (6)	248		250
4.300% fixed rate subordinated debt, due 2025 (7)	749		750
Banking Subsidiaries:
1.600% senior unsecured notes, due 2017 (8) (9)	752		749
2.300% senior unsecured notes, due 2018 (8) (10)	753		747
2.450% senior unsecured notes, due 2019 (8) (11)	763		752
2.500% senior unsecured notes, due 2019 (8) (12)	750		—
Federal Home Loan advances due through 2033	4,516		5,018
Other	14		25
Total long-term borrowed funds		$10,035		$9,886

⁽¹⁾ These balances are comprised of: principal balances of $350 million at March 31, 2016 and December 31, 2015, as well as the impact of ($3) million of unamortized deferred issuance costs and discount at March 31, 2016.

⁽²⁾ Borrowed funds with RBS. See Note 13 “Related Party Transactions and Significant Transactions with RBS” for further information.

⁽³⁾ Prior to January 1, 2016, interest was payable at a fixed rate per annum of 4.153%.

⁽⁴⁾ These balances are comprised of: principal balance of $208 million and $333 million at March 31, 2016 and December 31, 2015, respectively, as well as the impact from interest rate swaps of $6 million and ($2) million at March 31, 2016 and December 31, 2015, respectively. See Note 11 “Derivatives” for further information. In addition, on March 7, 2016, the Company repurchased $125 million of these securities from RBS. See Note 13 “Related Party Transactions and Significant Transactions with RBS” for further information.

⁽⁵⁾ These balances are comprised of: principal balance of $334 million at March 31, 2016 and December 31, 2015; impact from interest rate swaps of $12 million and ($3) million at March 31, 2016 and December 31, 2015, respectively. See Note 11 “Derivatives” for further information.

⁽⁶⁾ These balances are comprised of: principal balances of $250 million at March 31, 2016 and December 31, 2015, as well as the impact of ($2) million of unamortized deferred issuance costs and discount at March 31, 2016.

⁽⁷⁾ These balances are comprised of: principal balances of $750 million at March 31, 2016 and December 31, 2015, as well as the impact of ($1) million of unamortized deferred issuance costs and discount at March 31, 2016.

⁽⁸⁾ These securities were offered under CBNA’s Global Bank Note Program dated December 1, 2014.

⁽⁹⁾ These balances are comprised of: principal balances of $750 million at March 31, 2016 and December 31, 2015; impact from interest rate swaps of $3 million and ($1) million at March 31, 2016 and December 31, 2015, respectively; and ($1) million of unamortized deferred issuance costs and discount at March 31, 2016. See Note 11 “Derivatives” for further information.

⁽¹⁰⁾ These balances are comprised of: principal balances of $750 million at March 31, 2016 and December 31, 2015; impact from interest rate swaps of $6 million and ($3) million at March 31, 2016 and December 31, 2015, respectively; and ($3) million of unamortized deferred issuance costs and discount at March 31, 2016. See Note 11 “Derivatives” for further information.

⁽¹¹⁾ These balances are comprised of: principal balances of $750 million at March 31, 2016 and December 31, 2015; impact from interest rate swaps of $16 million and $2 million at March 31, 2016 and December 31, 2015, respectively; and ($3) million of unamortized deferred issuance costs and discount at March 31, 2016. See Note 11 “Derivatives” for further information.

⁽¹²⁾ The balance is comprised of: principal balance of $750 million at March 31, 2016; impact from interest rate swaps of $2 million and ($2) million of unamortized deferred issuance costs and discount at March 31, 2016. See Note 11 “Derivatives” for further information.

On July 31, 2015, we issued $250 million of subordinated debt with a 4.350% fixed rate and a ten year maturity. On August 3, 2015, we used the net proceeds of this issuance to repurchase 9,615,384 shares of our common stock directly from RBS.

On December 3, 2015, we repurchased $750 million of outstanding subordinated debt instruments held by RBS. The $3 million difference between the repurchase price and the net carrying amount of the subordinated debt was recognized as a gain on extinguishment of the debt. To fund the repurchase, we issued $750 million of new subordinated debt with a 4.300% fixed rate and a ten year maturity.

Long-term borrowed funds of $10.0 billion as of March 31, 2016increased$149 million from December 31, 2015, primarily driven by a $502 million decrease in long term FHLB advances and a $750 million increase in senior bank debt.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

Access to additional funding through repurchase agreements, collateralized borrowed funds or asset sales is available. Additionally, there is capacity to grow deposits or issue senior or subordinated notes.

Derivatives

We use pay-fixed swaps to hedge floating rate wholesale funding and to offset duration in fixed-rate assets. Notional balances totaled $5.0 billion as of March 31, 2016, same as of December 31, 2015. Pay-fixed rates on the swaps ranged from 1.82% to 4.30% as of March 31, 2016, compared to 1.96% to 4.30% as of December 31, 2015. We received the daily federal funds effective rate on the legacy $500 million notional, while the remaining $4.5 billion are forward starting positions which begin accruing starting in July 2016 and later periods.

We use receive-fixed swaps to minimize the exposure to variability in the interest cash flows on our floating rate assets, and to hedge market risk on fixed rate capital market debt issuance. At March 31, 2016 and December 31, 2015, the notional amount of receive-fixed swap hedges totaled $9.0 billion and $8.5 billion, respectively. The fixed-rate ranges were 1.06% to 2.05% and 0.77% to 2.04%, respectively. We paid one-month and three-month LIBOR on these swaps.

In February 2016, we terminated $3 billion of receive-fixed interest rate swap that hedged the interest rate exposure on floating rate commercial loans. The transaction resulted in a $12.5 million gain which will be amortized over the remaining life of the swap.

In March 2016, we entered into a $750 million receive-fixed interest-rate swap to manage the interest rate exposure on a medium term debt issued in March 2016. This agreement converted the fixed-rate debt coupon to three-month LIBOR based floating funding. We receive a fixed rate of 1.06% on the swap agreement and pay three month LIBOR.

We also sell interest rate swaps and foreign exchange forwards to commercial customers. Offsetting swap and forward agreements are simultaneously transacted to minimize our market risk associated with the customer derivative contracts. The assets and liabilities recorded for derivatives not designated as hedges reflect the market value of these transactions.

The table below presents our derivative assets and liabilities. For additional information regarding our derivative instruments, see Note 11 “Derivatives” in our unaudited interim Consolidated Financial Statements in Part I, Item 1 — Financial Statements, included elsewhere in this report.

	March 31, 2016								December 31, 2015
(dollars in millions)	Notional Amount (1)		Derivative Assets			Derivative Liabilities			Notional Amount (1)		Derivative Assets			Derivative Liabilities
Derivatives designated as hedging instruments:
Interest rate swaps		$14,000		$296			$167			$16,750		$96			$50
Derivatives not designated as hedging instruments:
Interest rate swaps	35,896		739			658			33,719		540			455
Foreign exchange contracts	8,928		146			138			8,366		163			156
Other contracts	1,117		11			8			981		8			5
Total derivatives not designated as hedging instruments			896			804					711			616
Gross derivative fair values			1,192			971					807			666
Less: Gross amounts offset in the Consolidated Balance Sheets (2)			(123		)	(123		)			(178		)	(178		)
Less: Cash collateral applied (2)			(1		)	(16		)			(4		)	(3		)
Total net derivative fair values presented in the Consolidated Balance Sheets (3)				$1,068			$832					$625			$485

⁽¹⁾ The notional or contractual amount of interest rate derivatives and foreign exchange contracts is the amount upon which interest and other payments under the contract are based. For interest rate derivatives, the notional amount is typically not exchanged. Therefore, notional amounts should not be taken as the measure of credit or market risk as they do not measure the true economic risk of these contracts.

⁽²⁾ Amounts represent the impact of legally enforceable master netting agreements that allow us to settle positive and negative positions.

⁽³⁾ We also offset assets and liabilities associated with repurchase agreements on our Consolidated Balance Sheets. See Note 2 “Securities” in our unaudited interim Consolidated Financial Statements in Part I, Item 1 — Financial Statements, included elsewhere in this report.

At March 31, 2016, the overall derivative asset value increased $443 million and the liability balance increased by $347 million from December 31, 2015, primarily due to decreased fixed interest rates at March 31, 2016, compared to December 31, 2015.

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Capital

As a bank holding company and a financial holding company, we are subject to regulation and supervision by the FRBG. Our primary subsidiaries are our two insured depository institutions, CBNA, a national banking association whose primary federal regulator is the OCC, and CBPA, a Pennsylvania-charted savings bank regulated by the Department of Banking of the Commonwealth of Pennsylvania and supervised by the FDIC as its primary federal regulator.

In July 2013, the FRB, OCC and FDIC issued the U.S. Basel III final rules. The rules implement the Basel Committee on Banking Supervision’s Basel III capital framework and certain provisions of the Dodd-Frank Act, including the Collins Amendment. The U.S. Basel III final rules substantially revised the risk-based capital and leverage requirements applicable to bank holding companies and their insured depository institution subsidiaries, including CBNA and CBPA. The U.S. Basel III final rules became effective for CFG and its depository institution subsidiaries, including CBNA and CBPA, on January 1, 2015 (subject to a phase-in period for certain provisions).

The U.S. Basel III final rules, among other things, (i) introduced a new capital measure called CET1, (ii) specified that Tier 1 capital consists of CET1 and “Additional Tier 1 capital” instruments meeting certain revised requirements, (iii) defined CET1 narrowly by requiring that most deductions/adjustments to regulatory capital measures be made to CET1 and not to the other components of capital, and (iv) expanded the scope of the deductions/adjustments to capital as compared to existing regulations.

The U.S. Basel III final rules also introduced a new capital conservation buffer (“CCB”), composed entirely of CET1, on top of these three minimum risk-weighted asset ratios. The implementation of the capital conservation buffer began on January 1, 2016 at the 0.625% level and will increase by 0.625% on each subsequent January 1, until the buffer reaches its fully phased in level of 2.5% on January 1, 2019. Banking institutions with a ratio of CET1 to risk-weighted assets below the effective minimum (4.5% plus the applicable capital conservation buffer) will be subject to constraints on capital distributions, including dividends, repurchases and certain executive compensation based on the amount of the shortfall. Under the U.S. Basel III final rules, the effective minimum capital ratios as of January 1, 2016 are:

• 5.125% CET1 to risk-weighted assets (minimum of 4.5% plus 0.625% CCB);

• 6.625% Tier 1 capital (CET1 plus Additional Tier 1 capital) to risk-weighted assets (minimum of 6% plus 0.625% CCB);

• 8.625% Total capital (Tier 1 capital plus Tier 2 capital) to risk-weighted assets (minimum of 8% plus 0.625% CCB); and

• 4.000% Tier 1 capital to average consolidated assets as reported on consolidated financial statements (known as the “leverage ratio”). The minimum leverage ratio of 4% is not impacted by the capital conservation buffer.

When fully phased in on January 1, 2019, the U.S. Basel III final rules will require CFG, CBNA and CBPA to maintain an additional capital conservation buffer of 2.5% of CET1, effectively resulting in minimum ratios of (i) CET1 to risk-weighted assets of at least 7%, (ii) Tier 1 capital to risk-weighted assets of at least 8.5%, (iii) a minimum ratio of Total capital to risk-weighted assets of at least 10.5%.

The U.S. Basel III final rules also provide for a number of deductions from and adjustments to CET1. These include, for example, the requirement that certain deferred tax assets and significant investments in non-consolidated financial entities be deducted from CET1 to the extent that any one such category exceeds 10% of CET1 or all such items, in the aggregate, exceed 15% of CET1. Implementation of the deductions and other adjustments to CET1 began on January 1, 2015 and will be phased-in over a 4-year period (beginning at 40% on January 1, 2015 and an additional 20% per year thereafter).

The U.S. Basel III final rules prescribe a standardized approach for risk weightings that expanded the risk-weighting categories from the general risk-based capital rules to a much larger and more risk-sensitive number of categories, depending on the nature of the assets, generally ranging from 0% for U.S. government and agency securities, to 600% for certain equity exposures, and resulting in higher risk weights for a variety of asset categories.

With respect to CBNA and CBPA, the U.S. Basel III final rules also revise the “prompt corrective action” regulations pursuant to Section 38 of the Federal Deposit Insurance Act, as discussed above in “Federal Deposit Insurance Act.”

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MANAGEMENT’S DISCUSSION AND ANALYSIS

The table below presents our actual regulatory capital ratios under Basel III Transitional rules as of March 31, 2016 and December 31, 2015. In addition, the table includes pro forma Basel III ratios as of March 31, 2016 and December 31, 2015, after full phase-in of all requirements to which we will be subject by January 1, 2019. Based on both current and fully phased-in Basel III requirements, all ratios remain well above current and future Basel III minima:

			Transitional Basel III						Pro Forma Basel III Assuming Full Phase-in
(dollars in millions)	Actual Amount		Actual Ratio		Required Minimum		Well-Capitalized Minimum for Purposes of Prompt Corrective Action		Actual Ratio(1)		Required Minimum + Required Capital Conservation Buffer for Non-Leverage Ratios		FDIA Required Well-Capitalized Minimum for Purposes of Prompt Corrective Action
Basel III Transitional as of March 31, 2016
Common equity tier 1 capital(2)(6)		$13,570	11.6	%	5.125	%	6.5	%	11.6	%	7.0	%	6.5	%
Tier 1 capital(3)(6)	13,817		11.9		6.625		8.0		11.8		8.5		8.0
Total capital(4)(6)	17,587		15.1		8.625		10.0		15.1		10.5		10.0
Tier 1 leverage(5)	13,817		10.4		4.000		5.0		10.4		4.0		5.0
Basel III Transitional as of December 31, 2015
Common equity tier 1 capital(2)		$13,389	11.7	%	4.5	%	6.5	%	11.7	%	7.0	%	6.5	%
Tier 1 capital(3)	13,636		12.0		6.0		8.0		11.9		8.5		8.0
Total capital(4)	17,505		15.3		8.0		10.0		15.3		10.5		10.0
Tier 1 leverage(5)	13,636		10.5		4.0		5.0		10.5		4.0		5.0

⁽¹⁾ These are non-GAAP financial measures. For more information on the computation of these non-GAAP financial measures, see “—Principal Components of Operations and Key Performance Metrics Used By Management - Key Performance Metrics and Non-GAAP Financial Measures.”

⁽²⁾ “Common equity tier 1 capital ratio” as of March 31, 2016 represents CET1 divided by total risk-weighted assets as defined under Basel III Standardized approach.

⁽³⁾ “Tier 1 capital ratio” is tier 1 capital, which includes CET1 capital plus non-cumulative perpetual preferred equity that qualifies as additional tier 1 capital, divided by total risk-weighted assets as defined under Basel III Standardized approach.

⁽⁴⁾ “Total capital ratio” is total capital divided by total risk-weighted assets as defined under Basel III Standardized approach.

⁽⁵⁾ “Tier 1 leverage ratio” is tier 1 capital divided by quarterly average total assets as defined under Basel III Standardized approach.

⁽⁶⁾ “Minimum Capital ratio” for 2016 includes capital conservation buffer of 0.625%.

Standardized Approach

The Basel III Standardized approach measures risk-weighted assets primarily for market risk and credit risk exposures. Exposures subject to market risk are measured on a basis generally consistent with how market risk-weighted assets were measured using the market risk rules as defined under the Basel 2.5. Refer to “—Market Risk — Market Risk Regulatory Capital,” for further information. CFG applies the Basel III standardized approach, as defined by the U.S. regulators, for determining the assignment of risk-weighted assets. Under the Standardized approach no distinction is made for variations in credit quality for corporate exposures. Additionally, the economic benefit of collateral is restricted to a limited list of eligible securities and cash. We estimate our common equity tier 1 capital ratio under the Basel III Standardized approach, on a fully phased-in basis, to be 11.6% at March 31, 2016. As of March 31, 2016, we estimated that our Basel III Standardized common equity tier 1 capital would be $13.6 billion and total risk-weighted assets would be $116.8 billion, on a fully-phased in basis. Our estimates under the Basel III Standardized approach may be refined over time because of further rulemaking or clarification by U.S. banking regulators or as our understanding and interpretation of the rules evolve. Actual results could differ from those estimates and assumptions.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

A reconciliation of Basel III Standardized Transitional approach to Basel III Standardized estimates on a fully-phased in basis for common equity tier 1 capital, total capital and risk-weighted assets, see the following table.

(dollars in millions)	March 31, 2016			December 31, 2015
Common equity tier 1 capital		$13,570			$13,389
Impact of intangibles at 100%	(1		)	(2		)
Fully phased-in common equity tier 1 capital(1)		$13,569			$13,387
Total capital		$17,587			$17,505
Impact of intangibles at 100%	(1		)	(2		)
Fully phased in common total capital(1)		$17,586			$17,503
Risk-weighted assets		$116,591			$114,084
Impact of intangibles - 100% capital deduction	(1		)	(2		)
Impact of mortgage servicing assets at 250% risk weight	233			246
Fully phased-in risk-weighted assets(1)		$116,823			$114,328
Transitional common equity tier 1 ratio(2)	11.6		%	11.7		%
Fully phased-in common equity tier 1 ratio(1)(2)	11.6			11.7
Transitional total capital ratio(3)	15.1			15.3
Fully phased-in total capital ratio(1)(3)	15.1			15.3

⁽¹⁾ These are non-GAAP financial measures.

⁽²⁾ “Common equity tier 1 capital ratio” as of March 31, 2016 represents CET1 divided by total risk-weighted assets as defined under Basel III Standardized approach.

⁽³⁾ “Total capital ratio” is total capital divided by total risk-weighted assets as defined under Basel III Standardized approach.

Regulatory Capital Ratios and Capital Composition

The following table presents capital and capital ratio information under Basel III Standardized approach as of March 31, 2016 and December 31, 2015:

									FDIA Requirements
	Actual				Minimum Capital Adequacy				Classification as “Well Capitalized”
(dollars in millions)	Amount		Ratio		Amount		Ratio		Amount		Ratio
Basel III Transitional as of March 31, 2016
Common equity tier 1 capital(1)(5)		$13,570	11.6	%		$5,975	5.125	%		$7,578	6.5	%
Tier 1 capital(2)(5)	13,817		11.9		7,724		6.625		9,327		8.0
Total capital(3)(5)	17,587		15.1		10,056		8.625		11,659		10.0
Tier 1 leverage(4)	13,817		10.4		5,318		4.000		6,648		5.0
Risk-weighted assets	116,591
Quarterly adjusted average assets	132,951
Basel III Transitional as of December 31, 2015
Common equity tier 1 capital(1)		$13,389	11.7	%		$5,134	4.5	%		$7,415	6.5	%
Tier 1 capital(2)	13,636		12.0		6,845		6.0		9,127		8.0
Total capital(3)	17,505		15.3		9,127		8.0		11,408		10.0
Tier 1 leverage(4)	13,636		10.5		5,218		4.0		6,523		5.0
Risk-weighted assets	114,084
Quarterly adjusted average assets	130,455

⁽¹⁾ “Common equity tier 1 capital ratio” as of March 31, 2016 represents CET1 divided by total risk-weighted assets as defined under Basel III Standardized approach.

⁽²⁾ “Tier 1 capital ratio” is tier 1 capital, which includes CET1 capital plus non-cumulative perpetual preferred equity that qualifies as additional tier 1 capital, divided by total risk-weighted assets as defined under Basel III Standardized approach.

⁽³⁾ “Total capital ratio” is total capital divided by total risk-weighted assets as defined under Basel III Standardized approach.

⁽⁴⁾ “Tier 1 leverage ratio” is tier 1 capital divided by quarterly average total assets as defined under Basel III Standardized approach.

⁽⁵⁾ “Minimum Capital ratio” for 2016 includes capital conservation buffer of 0.625%.

CET1 capital under Basel III Standardized Transitional rules was $13.6 billion at March 31, 2016, an increase of $181 million from $13.4 billion at December 31, 2015. The increase was primarily attributable to net income for three months endedMarch 31, 2016, net of dividends paid to stockholders and amortization of deferred tax related to goodwill. At March 31, 2016,

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there was approximately $247 million of additional tier 1 capital, reflecting the capital value after issuance costs of the 5.500% Fixed-to-Floating Non-Cumulative Perpetual Preferred Stock, Series A, issued on April 6, 2015. Tier 1 capital at March 31, 2016 was $13.8 billion, an increase of $181 million from $13.6 billion at December 31, 2015. Total capital was $17.6 billion at March 31, 2016, an increase of $82 million from December 31, 2015 driven primarily by net income, net of dividends paid to stockholders and the repurchase of subordinated debt.

Risk-weighted assets based on Basel III Standardized Transitional rules at March 31, 2016 were $116.6 billion, an increase of $2.5 billion as compared to December 31, 2015. The primary drivers for this change were growth in commercial and student loan exposures.

As of March 31, 2016, the tier 1 leverage ratio decreased approximately 6 basis points. This decline reflected the net impact of a $2.5 billion increase in adjusted quarterly average total assets, which drove a 20 basis point decline in the ratio, and the previously noted increase in tier 1 capital, which added 14 basis points to the ratio.

The following table presents our capital composition under the Basel III capital framework in effect for us at March 31, 2016 and at December 31, 2015:

	Transitional Basel III
(dollars in millions)	March 31, 2016			December 31, 2015
Total common stockholders’ equity		$19,718			$19,399
Exclusions(1):
Net unrealized (gains) losses recorded in accumulated other comprehensive income, net of tax:
Debt and marketable equity securities available for sale	(96		)	28
Derivatives	(35		)	(10		)
Unamortized net periodic benefit costs	367			369
Deductions:
Goodwill	(6,876		)	(6,876		)
Deferred tax liability associated with goodwill	494			480
Other intangible assets	(2		)	(1		)
Total Common Equity Tier 1	13,570			13,389
Qualifying preferred stock	247			247
Total Tier 1 Capital	13,817			13,636
Qualifying long-term debt securities as tier 2	2,488			2,595
Allowance for loan and lease losses	1,224			1,216
Allowance for credit losses for off-balance sheet exposure	58			58
Total capital		$17,587			$17,505

⁽¹⁾ As a Basel III Standardized approach institution, we selected the one-time election to opt out of the requirements to include all the components of AOCI.

Capital Adequacy Process

Our assessment of capital adequacy begins with our risk appetite and risk management framework. This framework provides for the identification, measurement and management of material risks. Capital requirements are determined for actual and forecasted risk portfolios using applicable regulatory capital methodologies. The assessment also considers the possible impacts of approved and proposed regulatory changes that will or may apply to future periods. Key analytical frameworks, which enable the comprehensive assessment of capital adequacy versus unexpected loss, supplement our base case forecast. These supplemental frameworks include integrated stress testing, as well as an internal capital adequacy requirement that builds on internally assessed economic capital requirements. A robust governance framework supports our capital planning process. This process includes capital management policies and procedures that document capital adequacy metrics and limits, as well as our comprehensive capital contingency plan and the active engagement of both the legal-entity boards and senior management in oversight and decision-making.

Forward-looking assessments of capital adequacy for us and for our banking subsidiaries feed development of capital plans that are submitted to the FRBG and other bank regulators. We prepare these plans in full compliance with the FRBG’s Capital Plan Rule and we participate annually in the FRBG’s extensive CCAR review process. In addition to the stress test requirements under CCAR, we also participate in semiannual stress tests required by the Dodd-Frank Act.

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In March 2015, the FRBG assessed our current capital plan in response to the CCAR process and issued a notice of non-objection. The maximum levels at which we may declare dividends and repurchase shares of our common stock through June 30, 2016 are governed by the proposed capital actions and, are subject to actual financial performance, as well as ongoing compliance with internal governance and all other regulatory requirements.

Capital Transactions

During the three months ended March 31, 2016, we completed the following capital actions:

• Repurchased $125 million aggregate principal amount of our 4.023% subordinated notes due 2024 on March 7, 2016;

• Declared a quarterly common stock dividend of $0.10 per share, aggregating to a dividend payment of approximately $53 million on February 18, 2016; and

• Declared a semi-annual dividend of $27.50 per share on the 5.500% fixed-to-floating rate non-cumulative perpetual Series A Preferred Stock, aggregating to a dividend payment of approximately $7 million on April 6, 2016.

We intend to continue to repurchase common stock and subordinated debt, as appropriate, subject to regulatory approval and market conditions. On April 5, 2016, we submitted our 2016 Capital Plan to the Federal Reserve under the CCAR process. By late May or early June, we expect to hear the results of the FRB’s internal stress test and of the FRB’s object/non-object decision to capital actions proposed in this Capital Plan.

At March 31, 2016, all regulatory ratios remained well above their respective fully phased-in Basel III minimum, which includes the capital conservation buffer for the risk-based ratios. Fully phased-in regulatory ratios are non-GAAP financial measures. For more information on computation of these non-GAAP financial measures, see “—Principal Components of Operations and Key Performance Metrics Used By Management — Key Performance Metrics and Non-GAAP Financial Measures”.

Banking Subsidiaries’ Capital

The following table presents our banking subsidiaries’ capital ratios under Basel III Standardized Transitional rules as of March 31, 2016 and December 31, 2015:

	Transitional Basel III
	March 31, 2016				December 31, 2015
(dollars in millions)	Amount		Ratio		Amount		Ratio
Citizens Bank, N.A.
Common equity tier 1 capital (1)		$10,894	11.7	%		$10,754	11.7	%
Tier 1 capital(2)	10,894		11.7		10,754		11.7
Total capital(3)	13,259		14.2		13,132		14.3
Tier 1 leverage(4)	10,894		10.6		10,754		10.7
Risk-weighted assets	93,287				91,625
Quarterly adjusted average assets	102,676				100,504
Citizens Bank of Pennsylvania
Common equity tier 1 capital(1)		$3,032	12.7	%		$3,017	13.0	%
Tier 1 capital(2)	3,032		12.7		3,017		13.0
Total capital(3)	3,595		15.1		3,559		15.4
Tier 1 leverage(4)	3,032		8.7		3,017		9.1
Risk-weighted assets	23,876				23,179
Quarterly adjusted average assets	34,739				33,045

⁽¹⁾ “Common equity tier 1 capital ratio” as of March 31, 2016 represents CET1 divided by total risk-weighted assets as defined under Basel III Standardized approach.

⁽²⁾ “Tier 1 capital ratio” is tier 1 capital, which includes CET1 capital plus non-cumulative perpetual preferred equity that qualifies as additional tier 1 capital, divided by total risk-weighted assets as defined under Basel III Standardized approach.

⁽³⁾ “Total capital ratio” is total capital divided by total risk-weighted assets as defined under Basel III Standardized approach.

⁽⁴⁾ “Tier 1 leverage ratio” is tier 1 capital divided by quarterly average total assets as defined under Basel III Standardized approach.

CBNA CET1 capital under Basel III Standardized Transitional rules was $10.9 billion at March 31, 2016, an increase of $140 million from $10.8 billion at December 31, 2015. The increase was primarily attributable to net income for the three months endedMarch 31, 2016, net of dividends paid to CFG. At March 31, 2016, CBNA held minimal additional tier 1 capital. Total capital was $13.3 billion at March 31, 2016, an increase of $127 million driven primarily by the increase in CET1 capital.

CBNA risk-weighted assets based on Basel III Standardized Transitional rules at March 31, 2016 were $93.3 billion, an increase of $1.7 billion as compared to December 31, 2015. The primary drivers for this change were the growth in commercial

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and student loan exposures. These increases were partially offset by a decrease in commitments and the exclusion of market risk RWA because CBNA did not meet the market risk reporting threshold.

As of March 31, 2016, the CBNA tier 1 leverage ratio decreased approximately 9 basis points, driven by an increase in adjusted quarterly average total assets of $2.2 billion resulting in a 23 basis point decline in the ratio, partially offset by a 14 basis point increase for higher CET1 capital described above.

CBPA CET1 capital under Basel III Standardized Transitional rules was $3.0 billion at March 31, 2016, an increase of $15 million from $3.0 billion at December 31, 2015. The increase was primarily attributable to amortization of deferred tax assets related to goodwill, as net income for the three months endedMarch 31, 2016 was largely offset by dividends paid to CFG.

At March 31, 2016, there was no additional tier 1 capital. Total capital was $3.6 billion at March 31, 2016, an increase of $36 million driven primarily by the increase in CET1 capital and an increase in allowance for credit losses.

CBPA risk-weighted assets based on Basel III Standardized Transitional rules at March 31, 2016 were $23.9 billion, an increase of $697 million as compared to December 31, 2015. The primary drivers for this change were growth in commercial and student loan exposures, as well as an increase in SoFi commitments.

As of March 31, 2016, the CBPA tier 1 leverage ratio decreased approximately 40 basis points, driven by an increase in adjusted quarterly average total assets of $1.7 billion resulting in a 45 basis point decline in the ratio, partially offset by a 5 basis point increase resulting from higher CET1 capital described above.

Liquidity

We define liquidity as an institution’s ability to meet its cash-flow and collateral obligations in a timely manner, at a reasonable cost. An institution must maintain current liquidity to meet its expected daily and forecasted cash-flow requirements, as well as contingent liquidity to meet unexpected (stress scenario) funding requirements. We consider the effective and prudent management of liquidity to be fundamental to our health and strength.

We manage liquidity at the consolidated enterprise level and at each material legal entity, including us, CBNA and CBPA.

CFG Liquidity

Our primary sources of cash are (i) dividends and interest received from our banking subsidiaries as a result of investing in bank equity and subordinated debt and (ii) externally issued subordinated debt. Our uses of liquidity include the following: (i) routine cash flow requirements as a bank holding company, including payments of dividends, interest and expenses; (ii) needs of subsidiaries, including our banking subsidiaries, for additional equity and, as required, their needs for debt financing; and (iii) extraordinary requirements for cash.

On March 7, 2016, we utilized excess cash to repurchase $125 million of 4.023% Subordinated Notes due 2024 from RBS.

Our cash and cash equivalents represent a source of liquidity that can be used to meet various needs. As of March 31, 2016, we held cash and cash equivalents of approximately $394 million, which should be viewed as a liquidity reserve.

Our liquidity risk is low for the following reasons: (i) we have no material non-banking subsidiaries, and our banking subsidiaries are self-funding; (ii) we have no outstanding senior debt at the CFG level; (iii) the capital structures of our banking subsidiaries are similar to our capital structure. As of March 31, 2016, our double leverage ratio (the combined equity of our subsidiaries divided by our equity) was 101.2%; and, (iv) our other cash flow requirements, such as operating expenses, are relatively small.

Banking Subsidiaries’ Liquidity

In the ordinary course of business, the liquidity of CBNA and CBPA is managed by matching sources and uses of cash. The primary sources of bank liquidity include (i) deposits from our consumer and commercial franchise customers; (ii) payments of principal and interest on loans and debt securities; and (iii) wholesale borrowings, as needed, and as described under “—Liquidity Risk Management and Governance.” The primary uses of bank liquidity include (i) withdrawals and maturities of deposits; (ii) payment of interest on deposits; (iii) funding of loan commitments; and (iv) funding of securities purchases. To the extent that the banks have relied on wholesale borrowings, uses also include payments of related principal and interest.

Our banking subsidiaries’ major businesses involve taking deposits and making loans. Hence, a key role of liquidity management is to ensure that customers have timely access to funds from deposits and loans. Liquidity management also involves maintaining sufficient liquidity to repay wholesale borrowings, pay operating expenses and support extraordinary funding requirements when necessary.

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From an external issuance perspective, during 2014, we created a $3.0 billion Global Note Program for CBNA. This debt represents a key source of unsecured, term, and stable funding, further diversifies the funding sources of CBNA, and creates a more peer-like funding structure for the consolidated enterprise. On March 14, 2016, we increased the size of this program from $3 billion to $5 billion, and CBNA issued $750 million in three-year fixed-rate scenario notes. Preceding this issuance, CBNA issued $750 million in three-year fixed-rate senior notes on December 3, 2015, and $1.5 billion in senior notes, consisting of $750 million of three-year fixed-rate notes and $750 million in five-year fixed-rate notes on December 1, 2014.

Liquidity Risk

We define liquidity risk as the risk that an entity will be unable to meet its payment obligations in a timely manner. We manage liquidity risk at the consolidated enterprise level, and for each material legal entity including us, CBNA and CBPA. Liquidity risk can arise due to contingent liquidity risk and/or funding liquidity risk.

Contingent liquidity risk is the risk that market conditions may reduce an entity’s ability to liquidate, pledge and/or finance certain assets and thereby substantially reduce the liquidity value of such assets. Drivers of contingent liquidity risk include general market disruptions as well as specific issues regarding the credit quality and/or valuation of a security or loan, issuer or borrower and/or asset class.

Funding liquidity risk is the risk that market conditions and/or entity-specific events may reduce an entity’s ability to raise funds from depositors and/or wholesale market counterparties. Drivers of funding liquidity risk may be idiosyncratic or systemic, reflecting impediments to operations and/or undermining of market confidence.

Factors Affecting Liquidity

Given the composition of their assets and borrowing sources, contingent liquidity at both CBNA and CBPA would be materially affected by such events as deterioration of financing markets for high-quality securities (e.g., mortgage-backed securities and other instruments issued by the GNMA, FNMA and the FHLMC), by any inability of the FHLBs to provide collateralized advances, and/or by a refusal of the FRB to act as lender of last resort in systemic stress. Similarly, given the structure of their balance sheets, the funding liquidity of CBNA and CBPA would be materially affected by an adverse idiosyncratic event (e.g., a major loss, causing a perceived or actual deterioration in its financial condition), an adverse systemic event (e.g., default or bankruptcy of a significant capital markets participant), or a combination of both (e.g., the financial crisis of 2008-2010). However, during the financial crisis, our banking subsidiaries reduced their dependence on unsecured wholesale funding to virtually zero. Consequently, and despite ongoing exposure to a variety of idiosyncratic and systemic events, we view our funding liquidity risk to be relatively modest.

An additional variable affecting our access, and the access of our banking subsidiaries, to unsecured wholesale market funds and to large denomination (i.e., uninsured) customer deposits is the credit ratings assigned by such agencies as Moody’s, Standard & Poor’s and Fitch. The following table presents our credit ratings:

	March 31, 2016
	Moody’s	Standard and Poor’s	Fitch
Citizens Financial Group, Inc.:
Long-term issuer	NR	BBB+	BBB+
Short-term issuer	NR	A-2	F2
Subordinated debt	NR	BBB	BBB
Preferred Stock	NR	BB+	BB-
Citizens Bank, N.A.:
Long-term issuer	Baa1	A-	BBB+
Short-term issuer	P-2	A-2	F2
Long-term deposits	A1	NR	A-
Short-term deposits	P-1	NR	F2
Citizens Bank of Pennsylvania:
Long-term issuer	Baa1	A-	BBB+
Short-term issuer	P-2	A-2	F2
Long-term deposits	A1	NR	A-
Short-term deposits	P-1	NR	F2
NR = Not rated

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Changes in our public credit ratings could affect both the cost and availability of our wholesale funding. As a result and in order to maintain a conservative funding profile, our banking subsidiaries continue to minimize reliance on unsecured wholesale funding. At March 31, 2016, the majority of wholesale funding consisted of secured borrowings from the FHLBs collateralized by high-quality residential mortgage collateral. At March 31, 2016, we had no outstanding short-term, unsecured and credit-sensitive wholesale funding.

Existing and evolving regulatory liquidity requirements represent another key driver of systemic liquidity conditions and liquidity management practices. The FRBG, the OCC, and the FDIC regularly evaluate our liquidity as part of the overall supervisory process, and the U.S. version of the LCR was effective for CFG beginning January 2016.

The LCR was developed to ensure banks have sufficient high-quality liquid assets to cover expected net cash outflows over a 30-day liquidity stress period. In September 2014, the U.S. federal banking regulators published the final rule to implement the LCR. This rule also introduced a modified version of the LCR in the United States, which generally applies to BHCs not active internationally (institutions with less than $10 billion of on-balance sheet foreign exposure), with total assets of greater than $50 billion but less than $250 billion. Under this definition, we are designated as a modified LCR company. As compared to the Basel Committee’s version of the LCR, the version of the LCR issued by the U.S. federal banking regulators includes a narrower definition of high-quality liquid assets, different prescribed cash inflow and outflow assumptions for certain types of instruments and transactions and a shorter phase-in schedule that began on January 1, 2015 and ends on January 1, 2017. Notably, as a modified LCR company, we were required to be 90% compliant beginning in January 2016, and 100% compliant beginning in January 2017. Achieving sustainable LCR compliance may require changes in the size and/or composition of our investment portfolio, the configuration of our discretionary wholesale funding portfolio, and our average cash position. We have been fully compliant with the LCR since its January 2016 effective date, up through and including March 31, 2016.

The U.S. federal bank regulatory agencies have issued a notice of proposed rulemaking to implement a modified NSFR for certain bank holding companies with more than $50 billion but less than $250 billion in assets and with less than $10 billion in on-balance sheet foreign exposures. Under this definition, we would be designated as a modified NSFR company. The NSFR is one of the two Basel III-based liquidity measures, along with the LCR, and is designed to promote medium- and long-term stable funding of the assets and off-balance sheet activities of banks and bank holding companies over a one-year time horizon. Generally consistent with the Basel Committee’s framework, under the proposed rule banking organizations would be required to hold an amount of available stable funding (“ASF”) over a one-year time horizon that equals or exceeds the institution’s amount of required stable funding (“RSF”), with the ASF representing the numerator and the RSF representing the denominator of the NSFR. Banking organizations subject to the modified NSFR would multiply the RSF amount by 70%, such that the RSF amount required for these companies would be equivalent to 70% of the RSF amount that would be required pursuant to the full NSFR generally applicable to institutions with more than $250 billion in total assets or $10 billion or more in on-balance sheet foreign exposures under the proposed rule. The proposed rule includes detailed descriptions of the items that would comprise ASF and RSF and standardized factors that would apply to ASF and RSF items, and would require any institution whose applicable modified NSFR falls under 100% to notify the appropriate federal regulator and develop a remediation plan.

We are currently evaluating the impact of the U.S. federal bank regulatory agencies’ NSFR framework. If ultimately adopted as currently proposed, the implementation of the NSFR could impact our liquidity and funding requirements and practices in the future, including by incentivizing increased use of long-term debt as a funding source.

We continue to review and monitor these liquidity requirements to develop appropriate implementation plans and liquidity strategies. We expect to be fully compliant with the final rules on or prior to the applicable effective date.

Liquidity Risk Management and Governance

Liquidity risk is measured and managed by the Funding and Liquidity Unit within our Treasury unit in accordance with policy guidelines promulgated by our Board and the Asset and Liability Management Committee. In managing liquidity risk, the Funding and Liquidity Unit delivers regular and comprehensive reporting, including current levels versus threshold limits for a broad set of liquidity metrics and early warning indicators, explanatory commentary relating to emerging risk trends and, as appropriate, recommended remedial strategies.

The mission of our Funding and Liquidity Unit is to deliver prudent levels of current, projected and contingent liquidity from stable sources, in a timely manner and at a reasonable cost, without significant adverse consequences.

We seek to accomplish this mission by funding loans with stable deposits; by prudently controlling dependence on wholesale funding, particularly short-term unsecured funding; and by maintaining ample available liquidity, including a contingent liquidity buffer of unencumbered high-quality loans and securities.

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As of March 31, 2016:

• Core deposits, including loans and deposits held for sale, continued to be our primary source of funding and our consolidated period end loan-to-deposit ratio was 99.2%;

• There was no outstanding short-term unsecured wholesale funding, and our net overnight position (which is defined as excess cash balances held at the Federal Reserve Banks plus federal funds sold minus federal funds purchased) totaled $1.0 billion;

• Contingent liquidity was $21.9 billion; net overnight position (defined above), totaled $1.0 billion; unencumbered liquid securities totaled $17.4 billion; and available FHLB capacity primarily secured by mortgage loans totaled $3.5 billion; and

• Available discount window capacity, defined as available total borrowing capacity from the Federal Reserve based on identified collateral, is secured by non-mortgage commercial and consumer loans and totaled $10.7 billion. Use of this borrowing capacity would likely be considered only during exigent circumstances.

The Funding and Liquidity Unit monitors a variety of liquidity and funding early warning indicators and metrics, including specific risk thresholds and limits. The early warning indicators include both the internal and external environment, providing both an inside-out and an outside-in risk perspective. The metrics are broadly classified as follows:

• Current liquidity sources and capacities, including excess cash at the Federal Reserve Banks, free and liquid securities and available and secured FHLB borrowing capacity;

• Contingent stressed liquidity, including idiosyncratic, systemic and combined stress scenarios, in addition to evolving regulatory requirements such as the LCR and the NSFR; and

• Current and prospective exposures, including secured and unsecured wholesale funding and spot and cumulative cash-flow gaps across a variety of horizons.

Further, certain of these metrics are monitored for each of us, our banking subsidiaries, and for our consolidated enterprise on a daily basis, including net overnight position, unencumbered securities, internal liquidity, available FHLB borrowing capacity and total contingent liquidity. In order to identify emerging trends and risks and inform funding decisions, specific metrics are also forecasted over a one-year horizon.

Cash flows from operating activities contributed $374 million in the first quarter of 2016. Net cash used by investing activities was $2.3 billion, primarily reflecting a net increase in loans and leases of $2.4 billion and securities available for sale portfolio purchases of $706 million, partially offset by proceeds from maturities, paydowns and sales of securities available for sale of $926 million. Cash provided by financing activities was $717 million, driven by proceeds from issuance of long-term borrowed funds of $750 million, and a net increase in other short-term borrowed funds of $670 million, partially offset by repayments of long-term borrowed funds of $629 million. These activities represented a cumulative decrease in cash and cash equivalents of $1.2 billion, which, when added to the cash and cash equivalents balance of $3.1 billion at the beginning of the year, resulted in an ending balance of cash and cash equivalents of $1.9 billion as of March 31, 2016.

In the first quarter 2015, our operating activities contributed $98 million in net cash, reflecting an increase in other assets compared to the first quarter 2014. Net cash used by investing activities was $1.7 billion, primarily reflecting net securities available for sale portfolio purchases of $2.2 billion and a net increase in loans and leases of $1.2 billion, partially offset by proceeds from maturities, paydowns and sales of securities available for sale of $2.0 billion. Cash provided by financing activities was $3.4 billion, driven by a net increase in deposits of $3.3 billion. These activities represented a cumulative increase in cash and cash equivalents of $1.7 billion, which, when added to the cash and cash equivalents balance of $3.3 billion at the beginning of the year, resulted in an ending balance of cash and cash equivalents of $5.0 billion as of March 31, 2015.

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Off-Balance Sheet Commitments

The following table presents our outstanding off-balance sheet commitments. See Note 12 “Commitments and Contingencies” to our unaudited interim Consolidated Financial Statements in Part I, Item 1 — Financial Statements, included elsewhere in this report.

(dollars in millions)	March 31, 2016		December 31, 2015		Change			Percent
Commitment amount:
Undrawn commitments to extend credit		$56,989		$56,524		$465		1	%
Financial standby letters of credit	1,921		2,010		(89		)	(4	)
Performance letters of credit	41		42		(1		)	(2	)
Commercial letters of credit	63		87		(24		)	(28	)
Marketing rights	47		47		—			—
Risk participation agreements	53		26		27			104
Residential mortgage loans sold with recourse	10		10		—			—
Total		$59,124		$58,746		$378		1	%

In November 2015, we entered into an agreement with RBS to purchase $500 million of our subordinated notes held by RBS by July 30, 2016, subject to regulatory approval and rating agency considerations. See Note 13 “Related Party Transactions and Significant Transactions with RBS,” to our unaudited interim Consolidated Financial Statements in Part I, Item 1 — Financial Statements, included elsewhere in this report.

On January 7, 2016, we entered into an agreement to purchase student loans on a quarterly basis beginning with the first calendar quarter in 2016 and ending with the fourth calendar quarter in 2016. Under the terms of the agreement, we committed to purchase a minimum of $125 million of loans per quarter. The minimum and maximum amount of the aggregate purchase principal balance of loans under the terms of the agreement are $500 million and $1.0 billion, respectively. The agreement will terminate immediately if at any time during its term the aggregate purchase principal balance of loans equals the maximum amount. The agreement may be extended by written agreement of the parties for an additional four quarters. We may terminate the agreement at will with payment of a termination fee equal to the product of $1 million times the number of calendar quarters remaining in the term.     

Our agreement to purchase automobile loans, originally entered into in May 2014, was most recently amended on January 15, 2016. For quarterly periods on or after August 1, 2015, the minimum and maximum purchases are $50 million and $200 million, respectively. The agreement automatically renews until terminated by either party. We may cancel the agreement at will with payment of a variable termination fee. There is no termination fee after May 2017.

Critical Accounting Estimates

Our unaudited interim Consolidated Financial Statements, which are included elsewhere in this report, are prepared in accordance with GAAP. The preparation of financial statements in conformity with GAAP requires us to establish accounting policies and make estimates that affect amounts reported in our audited Consolidated Financial Statements.

An accounting estimate requires assumptions and judgments about uncertain matters that could have a material effect on our unaudited interim Consolidated Financial Statements. Estimates are made using facts and circumstances known at a point in time. Changes in those facts and circumstances could produce results substantially different from those estimates. The most significant accounting policies and estimates and their related application are discussed below.

See Note 1 “Significant Accounting Policies” to our audited Consolidated Financial Statements in the Annual Report on Form 10-K for the year ended December 31, 2015, for further discussion of our significant accounting policies.

Allowance for Credit Losses

Management’s estimate of probable losses in our loan and lease portfolios including unfunded lending commitments is recorded in the ALLL and the reserve for unfunded lending commitments, at levels that we believe to be appropriate as of the balance sheet date. Our determination of such estimates is based on a periodic evaluation of the loan and lease portfolios and unfunded credit facilities, as well as other relevant factors. This evaluation is inherently subjective and requires significant estimates and judgments of underlying factors, all of which are susceptible to change.

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The ALLL and reserve for unfunded lending commitments could be affected by a variety of internal and external factors. Internal factors include portfolio performance such as delinquency levels, assigned risk ratings, the mix and level of loan balances, differing economic risks associated with each loan category and the financial condition of specific borrowers. External factors include fluctuations in the general economy, unemployment rates, bankruptcy filings, developments within a particular industry, changes in collateral values and factors particular to a specific commercial credit such as competition, business and management performance. The ALLL may be adjusted to reflect our current assessment of various qualitative risks, factors and events that may not be measured in our statistical procedures. There is no certainty that the ALLL and reserve for unfunded lending commitments will be appropriate over time to cover losses because of unanticipated adverse changes in any of these internal, external or qualitative factors.

The evaluation of the adequacy of the commercial, commercial real estate, and lease ALLL and reserve for unfunded lending commitments is primarily based on risk rating models that assess probability of default, loss given default and exposure at default on an individual loan basis. The models are primarily driven by individual customer financial characteristics and are validated against historical experience. Additionally, qualitative factors may be included in the risk rating models. After the aggregation of individual borrower incurred loss, additional overlays can be made based on back-testing against historical losses and forward loss curve ratios.

For nonaccruing commercial and commercial real estate loans with an outstanding balance of $3 million or greater and for all commercial and commercial real estate TDRs (regardless of size), we conduct specific analysis on a loan level basis to determine the probable amount of credit loss. If appropriate, a specific ALLL is established for the loan through a charge to the provision for credit losses. For all classes of impaired loans, individual loan measures of impairment may result in a charge-off to the ALLL, if deemed appropriate. In such cases, the provision for credit losses is not affected when a specific reserve for at least that amount already exists. Techniques utilized include comparing the loan’s carrying amount to the estimated present value of its future cash flows, the fair value of its underlying collateral, or the loan’s observable market price. The technique applied to each impaired loan is based on the workout officer’s opinion of the most probable workout scenario. Historically, this has generally led to the use of the estimated present value of future cash flows approach. The fair value of underlying collateral will be used if the loan is deemed collateral dependent. For loans that use the fair value of underlying collateral approach, a charge-off assessment is performed quarterly to write the loans down to fair value.

For most non-impaired retail loan portfolio types, the ALLL is based upon the incurred loss model utilizing the PD, LGD and exposure at default on an individual loan basis. When developing these factors, we may consider the loan product and collateral type, LTV ratio, lien position, borrower’s credit, time outstanding, geographic location, delinquency status and incurred loss period. Incurred loss periods are reviewed and updated at least annually, and potentially more frequently when economic situations change rapidly, as they tend to fluctuate with economic cycles. Incurred loss periods are generally longer in good economic times and shorter in bad times. Certain retail portfolios, including SBO home equity loans, student loans, and credit card receivables utilize roll rate models to estimate the ALLL. For the portfolios measured using the incurred loss model, roll rate models are also used to support management overlays if deemed necessary.

For home equity lines and loans, a number of factors impact the PD. Specifically, the borrower’s current FICO score, the utilization rate, delinquency statistics, borrower income, current CLTV ratio and months on books are all used to assess the borrower’s creditworthiness. Similarly, the loss severity is also impacted by various factors, including the utilization rate, the CLTV ratio, the lien position, the Housing Price Index change for the location (as measured by the Case-Shiller index), months on books and current loan balance.

When we are not in a first lien position, we use delinquency information on the first lien exposures obtained from third-party credit information providers in the credit assessment. For all first liens, whether owned by a third party or by us, an additional assessment is performed on a quarterly basis. In this assessment, the most recent three months’ performance of the senior liens is reviewed for delinquency (90 days or more past due), modification, foreclosure and/or bankruptcy statuses. If any derogatory status is present, the junior lien will be placed on nonaccrual status regardless of its delinquency status on our books. This subsequent change to nonaccrual status will alter the treatment in the PD model, thus affecting the reserve calculation.

In addition, the first lien exposure is combined with the second lien exposure to generate a CLTV. The CLTV is a more accurate reflection of the leverage of the borrower against the property value, as compared to the LTV from just the junior lien(s). The CLTV is used for modeling both the junior lien PD and LGD. This also impacts the ALLL rates for the junior lien HELOCs.

The above measures are all used to assess the PD and LGD for HELOC borrowers for whom we originated the loans. There is also a portfolio of home equity products that were originated and serviced by others; however, we currently service some of the loans in this portfolio. The SBO portfolio is modeled as a separate class and the reserves for this class are generated by using the delinquency roll rate models as described below.

For retail TDRs that are not collateral-dependent, allowances are developed using the present value of expected future cash flows, compared to the recorded investment in the loans. Expected re-default factors are considered in this analysis. Retail

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TDRs that are deemed collateral-dependent are written down to the fair market value of the collateral less costs to sell. The fair value of collateral is periodically monitored subsequent to the modification.

Changes in the levels of estimated losses, even if minor, can significantly affect management’s determination of an appropriate ALLL. For consumer loans, losses are affected by such factors as loss severity, collateral values, economic conditions, and other factors. A 1% and 5% increase in the estimated loss rate for consumer loans at December 31, 2015 would have increased the ALLL by $5 million and $26 million, respectively. The ALLL for our Commercial Banking segment is sensitive to assigned credit risk ratings and inherent loss rates. If 10% and 20% of the December 31, 2015 year end loan balances (including unfunded commitments) within each risk rating category of our Commercial Banking segment had experienced downgrades of two risk categories, the ALLL would have increased by $36 million and $72 million, respectively.

Commercial loans and leases are charged off to the ALLL when there is little prospect of collecting either principal or interest. Charge-offs of commercial loans and leases usually involve receipt of borrower-specific adverse information. For commercial collateral-dependent loans, an appraisal or other valuation is used to quantify a shortfall between the fair value of the collateral less costs to sell and the recorded investment in the commercial loan. Retail loan charge-offs are generally based on established delinquency thresholds rather than borrower-specific adverse information. When a loan is collateral-dependent, any shortfalls between the fair value of the collateral less costs to sell and the recorded investment is promptly charged off. Placing any loan or lease on nonaccrual status does not by itself require a partial or total charge-off; however, any identified losses are charged off at that time.

For additional information regarding the ALLL and reserve for unfunded lending commitments, see Note 1 “Significant Accounting Policies,” to our audited Consolidated Financial Statements in the Annual Report on Form 10-K for the year ended December 31, 2015 and Note 4 “Allowance for Credit Losses, Nonperforming Assets and Concentrations of Credit Risk,” to our unaudited interim Consolidated Financial Statements in Part I, Item 1 — Financial Statements, included elsewhere in this report.

Fair Value

We measure fair value using the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is based upon quoted market prices in an active market, where available. If quoted prices are not available, observable market-based inputs or independently sourced parameters are used to develop fair value, whenever possible. Such inputs may include prices of similar assets or liabilities, yield curves, interest rates, prepayment speeds and foreign exchange rates.

We classify our assets and liabilities that are carried at fair value in accordance with the three-level valuation hierarchy:

• Level 1. Quoted prices (unadjusted) in active markets for identical assets or liabilities;

• Level 2. Observable inputs other than Level 1 prices, such as quoted prices for similar instruments; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by market data for substantially the full term of the asset or liability; and

• Level 3. Unobservable inputs that are supported by little or no market information and that are significant to the fair value measurement.

Classification in the hierarchy is based upon the lowest level input that is significant to the fair value measurement of the asset or liability. For instruments classified in Level 1 and 2 where inputs are primarily based upon observable market data, there is less judgment applied in arriving at the fair value. For instruments classified in Level 3, management judgment is more significant due to the lack of observable market data.

Significant assets measured at fair value on a recurring basis include our mortgage-backed securities available for sale. These instruments are priced using an external pricing service and are classified as Level 2 within the fair value hierarchy. The service’s pricing models use predominantly observable valuation inputs to measure the fair value of these securities under both the market and income approaches. The pricing service utilizes a matrix pricing methodology to price our U.S. agency pass-through securities, which involves making adjustments to to-be-announced security prices based on a matrix of various mortgage-backed securities characteristics such as weighted-average maturities, indices and other pool-level information. Other agency and non-agency mortgage-backed securities are priced using a discounted cash flow methodology. This methodology includes estimating the cash flows expected to be received for each security using projected prepayment speeds and default rates based on historical statistics of the underlying collateral and current market conventions. These estimated cash flows are then discounted using market-based discount rates that incorporate characteristics such as average life, volatility, ratings, performance of the underlying collateral, and prevailing market conditions.

We review and update the fair value hierarchy classifications on a quarterly basis. Changes from one quarter to the next related to the observability of inputs in fair value measurements may result in a reclassification between the fair value hierarchy levels and are recognized based on year-end balances. We also verify the accuracy of the pricing provided by our primary external

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pricing service on a quarterly basis. This process involves using a secondary external vendor to provide valuations for our securities portfolio for comparison purposes. Any securities with discrepancies beyond a certain threshold are researched and, if necessary, valued by an independent outside broker.

Fair value is also used on a nonrecurring basis to evaluate certain assets for impairment or for disclosure purposes. Examples of nonrecurring uses of fair value include mortgage servicing rights accounted for by the amortization method, loan impairments for certain loans and goodwill.

For additional information regarding our fair value measurements, see Note 1 “Significant Accounting Policies,” our audited Consolidated Financial Statements in the Annual Report on Form 10-K for the year ended December 31, 2015 and Note 2 “Securities,” Note 6 “Mortgage Banking,” and Note 11 “Derivatives” to our unaudited interim Consolidated Financial Statements in Part I, Item 1 — Financial Statements, included elsewhere in this report.

Goodwill

Goodwill is an asset that represents the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. Goodwill is not amortized, but is subject to annual impairment tests. Goodwill is assigned to reporting units at the date the goodwill is initially recorded. A reporting unit is a business operating segment or a component of a business operating segment. Once goodwill has been assigned to reporting units, it no longer retains its association with a particular acquisition, and all of the activities within a reporting unit, whether acquired or organically grown, are available to support the value of the goodwill.

The goodwill impairment analysis is a two-step test. The first step, used to identify potential impairment, involves comparing each reporting unit’s fair value to its carrying value including goodwill. If the fair value of a reporting unit exceeds its carrying value, applicable goodwill is deemed to be not impaired. If the carrying value exceeds fair value, there is an indication of impairment and the second step is performed to measure the amount of impairment.

The second step involves calculating an implied fair value of goodwill for each reporting unit for which the first step indicated impairment. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination, which is the excess of the fair value of the reporting unit, as determined in the first step, over the aggregate fair values of the individual assets, liabilities and identifiable intangible assets as if the reporting unit were being acquired in a business combination. If the implied fair value of goodwill exceeds the carrying value of goodwill assigned to the reporting unit, there is no impairment. If the carrying value of goodwill assigned to a reporting unit exceeds the implied fair value of the goodwill, an impairment charge is recorded for the excess. An impairment loss recognized cannot exceed the amount of goodwill assigned to a reporting unit, and the loss establishes a new basis in the goodwill. Subsequent reversal of goodwill impairment losses is not permitted.

We review goodwill for impairment annually as of October 31 or more often if events or circumstances indicate that it is more likely than not that the fair value of one or more reporting units is below its carrying value. We rely on the income approach (discounted cash flow method) as the primary method for determining fair value. Market-based methods are used as benchmarks to corroborate the value determined by the discounted cash flow method.

We rely on several assumptions when estimating the fair value of our reporting units using the discounted cash flow method. These assumptions include the current discount rate, as well as projected loan losses, income taxes and capital retention rates. Discount rates are estimated based on the Capital Asset Pricing Model, which considers the risk-free interest rate, market risk premium, beta and unsystematic risk and size premium adjustments specific to a particular reporting unit. The discount rates are also calibrated on the assessment of the risks related to the projected cash flows of each reporting unit. Multi-year financial forecasts are developed for each reporting unit by considering several key business drivers such as new business initiatives, customer retention standards, market share changes, anticipated loan and deposit growth, forward interest rates, historical performance and industry and economic trends, among other considerations. The long-term growth rate used in determining the terminal value of each reporting unit was estimated based on management’s assessment of the minimum expected terminal growth rate of each reporting unit, as well as broader economic considerations such as gross domestic product and inflation.

We corroborate the fair value of our reporting units determined by the discounted cash flow method using market-based methods: a comparable company method and a comparable transaction method. The comparable company method measures fair value of a business by comparing it to publicly traded companies in similar lines of business. This involves identifying and selecting the comparable companies based on a number of factors (i.e., size, growth, profitability, risk and return on investment), calculating the market multiples (i.e., price-to-tangible book value, price-to-cash earnings and price-to-net income) of these comparable companies and then applying these multiples to our operating results to estimate the value of the reporting unit’s equity on a marketable, minority basis. A control premium is then applied to this value to estimate the fair value of the reporting unit on a marketable, controlling basis. The comparable transaction method measures fair value of a business based on exchange prices in actual transactions and on asking prices for controlling interests in public or private companies currently offered for sale. The

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process involves comparison and correlation of us with other similar companies. Adjustments for differences in factors described earlier (i.e., size, growth, profitability, risk and return on investment) are also considered.

As a best practice, we also corroborate the fair value of our reporting units determined by the discounted cash flow method by adding the aggregated sum of these fair value measurements to the fair value of our non-segment operations and comparing this total to our observed market capitalization. As part of this process, we analyze the implied control premium to evaluate its reasonableness. All facts and circumstances are considered when completing this analysis, including observed transaction data and any additional external evidence supporting the implied control premium. Since none of our reporting units are publicly traded, individual reporting unit fair value determinations cannot be directly correlated to CFG’s common stock price. The sum of the fair values of the reporting units at October 31, 2015 exceeded the overall market capitalization of CFG as of October 31, 2015. Although we believe it is reasonable to conclude that market capitalization could be an indicator of fair value over time, we do not believe that our current market capitalization reflects the aggregate fair value of our individual reporting units.

The valuation of goodwill is dependent on forward-looking expectations related to the performance of the U.S. economy and our associated financial performance. The prolonged delay in the full recovery of the U.S. economy, and the impact of that delay on earnings expectations, prompted a goodwill impairment test as of June 30, 2013. Although the U.S. economy has demonstrated signs of recovery, notably improvements in unemployment and housing, the pace and extent of recovery in these indicators, as well as in overall gross domestic product, have lagged previous expectations. The impact of the slow recovery is most evident in our Consumer Banking reporting unit. Accordingly, the percentage by which the estimated fair value of our Consumer Banking reporting unit exceeded its carrying value declined from 7% at December 31, 2011 to 5% at December 31, 2012.

During the first half of 2013, we observed further deceleration of expected growth for our Consumer Banking reporting unit’s future profits based on forecasted economic growth for the U.S. economy and the continuing impact of the new regulatory framework in the financial industry. This deceleration was incorporated into our revised earnings forecast in the second quarter of 2013, and we subsequently concluded that there was a likelihood of greater than 50% that goodwill impairment had occurred as of June 30, 2013.

An interim goodwill impairment test was subsequently performed for our Consumer Banking and Commercial Banking reporting units. Step One of these tests indicated that (1) the fair value of our Consumer Banking reporting unit was less than its carrying value by 19% and (2) the fair value of our Commercial Banking reporting unit exceeded its carrying value by 27%. Step Two of the goodwill impairment test was subsequently performed for our Consumer Banking reporting unit, which resulted in the recognition of a pre-tax $4.4 billion impairment charge in our Consolidated Statement of Operations for the period ending June 30, 2013. The impairment charge, which was a non-cash item, had minimal impact on our tier 1 risk-based and total risk-based capital ratios. The impairment charge had no impact on our liquidity position or tangible common equity.

We performed an annual test for impairment of goodwill for both reporting units as of October 31, 2015. As of this testing date, the percentage by which the fair value of our Consumer Banking reporting unit exceeded its carrying value was 6%, and the percentage by which the fair value of our Commercial Banking reporting unit exceeded its carrying value was 8%.

We based the fair value estimates used in our annual goodwill impairment testing on assumptions we believe to be representative of assumptions that a market participant would use in valuing the reporting units but that are unpredictable and inherently uncertain, including estimates of future growth rates and operating margins and assumptions about the overall economic climate and the competitive environment for our reporting units. There can be no assurances that future estimates and assumptions made for purposes of goodwill testing will prove accurate predictions of the future. If the assumptions regarding business plans, competitive environments, market conditions or anticipated growth rates are not achieved, or a market participant view of our total fair value declines, we may be required to record goodwill impairment charges in future periods.

For additional information regarding our goodwill impairment testing, see Note 1 “Significant Accounting Policies” and Note 9 “Goodwill,” to our audited Consolidated Financial Statements in the Annual Report on Form 10-K for the year ended December 31, 2015.

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Income Taxes

Accrued income taxes are reported as a component of either other assets or other liabilities, as appropriate, in the Consolidated Balance Sheets and reflect our estimate of income taxes to be paid or that effectively have been prepaid. Deferred income tax assets and liabilities represent the amount of future income taxes to be paid or that effectively have been prepaid, and the net balance is reported as an asset or liability in the Consolidated Balance Sheets. We determine the realization of the deferred tax asset based upon an evaluation of the four possible sources of taxable income: (1) the future reversals of taxable temporary differences; (2) future taxable income exclusive of reversing temporary differences and carryforwards; (3) taxable income in prior carryback years; and (4) tax planning strategies. In projecting future taxable income, we utilize forecasted pre-tax earnings, adjust for the estimated book tax differences and incorporate assumptions, including the amount of income allocable to taxing jurisdictions. These assumptions require significant judgment and are consistent with the plans and estimates that we use to manage the underlying businesses. The realization of the deferred tax assets could be reduced in the future if these estimates are significantly different than forecasted.

We are subject to income tax in the United States and multiple state and local jurisdictions. The tax laws and regulations in each jurisdiction may be interpreted differently in certain situations, which could result in a range of outcomes. Thus, we are required to exercise judgment regarding the application of these tax laws and regulations. We evaluate and recognize tax liabilities related to any tax uncertainties. Due to the complexity of some of these uncertainties, the ultimate resolution may differ from the current estimate of tax liabilities or refunds.

Our estimate of accrued income taxes, deferred income taxes and income tax expense can also change in any period as a result of new legislative or judicial guidance impacting tax positions, as well as changes in income tax rates. Any changes, if they occur, can be significant to our consolidated financial position, results of operations or cash flows.

For additional information regarding income taxes, see Note 1 “Significant Accounting Policies,” to our audited Consolidated Financial Statements in the Annual Report on Form 10-K for the year ended December 31, 2015 and Note 10 “Income Taxes,” to our unaudited interim Consolidated Financial Statements in Part I, Item 1 — Financial Statements, included elsewhere in this report.

Risk Governance

We are committed to maintaining a strong, integrated and proactive approach to the management of all risks to which we are exposed in pursuit of our business objectives. A key aspect of our Board’s responsibility as the main decision making body is setting our risk appetite to ensure that the levels of risk that we are willing to accept in the attainment of our strategic business and financial objectives are clearly understood.

To enable the Board to carry out its objectives, it has delegated authority for risk management activities, as well as governance and oversight of those activities, to a number of Board and executive management level risk committees. The key committees that specifically consider risk across the enterprise are set out in the diagram below.

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Chief Risk Officer

The CRO directs our overall risk management function overseeing the credit, interest rate, market, liquidity, operational, compliance, strategic and reputational risk management. The CRO reports to our CEO and to the Board Risk Committee.

Risk Framework

Our risk management framework is embedded in our business through a “Three Lines of Defense” model which defines responsibilities and accountabilities.

First Line of Defense

The business lines (including their associated support functions) are the First Line of Defense and are accountable for owning and managing, within our defined risk appetite, the risks which exist in their respective business areas. The business lines are responsible for performing regular risk assessments to identify and assess the material risks that arise in their area of responsibility, complying with relevant risk policies, testing and certifying the adequacy and effectiveness of their controls on a regular basis, establishing and documenting operating procedures and establishing and owning a governance structure for identifying and managing risk.

Second Line of Defense

The Second Line of Defense includes independent monitoring and control functions accountable for developing and ensuring implementation of risk and control frameworks and related policies. This centralized risk function is appropriately independent from the business and is accountable for overseeing and challenging our business lines on the effective management of their risks. This risk function utilizes training, communications and awareness to provide expert support and advice to the business lines. This includes interpreting the risk policy standards and risk management framework, overseeing compliance by the businesses with policies and responsibilities, including providing relevant management information and escalating concerns where appropriate.

The Executive Risk Committee, chaired by the CRO, actively considers our inherent material risks, analyzes our overall risk profile and seeks confirmation that the risks are being appropriately identified, assessed and mitigated.

Third Line of Defense

Our Internal Audit function is the Third Line of Defense providing independent assurance with a view of the effectiveness of Citizens’ internal controls, governance practices, and culture so that risk is managed appropriately for the size, complexity, and risk profile of the organization. Internal Audit has complete and unrestricted access to any and all Bank records, physical properties, and personnel. Internal Audit issues a report following each internal review and provides an audit opinion to Citizens’ Audit Committees on a quarterly basis.

Credit Quality Assurance also reports to the Chief Audit Executive and also provides the Boards, senior management and other stakeholders with independent assurance on the quality of credit portfolios and adherence to agreed Credit Risk Appetite and Credit Policies and processes. In line with its procedures and regulatory expectations, the Credit Quality Assurance function undertakes a program of portfolio testing, assessing and reporting through four Risk Pillars of Asset Quality, Rating and Data Integrity, Risk Management and Credit Risk Appetite.

Risk Appetite

Risk appetite is a strategic business and risk management tool. We define our risk appetite as the maximum limit of acceptable risk beyond which we would either be unable to achieve our strategic objectives and capital adequacy obligations or would assume an unacceptable amount of risk to do so. The Board Risk Committee advises our Board of Directors in relation to current and potential future risk strategies, including determination of risk appetite and tolerance.

The principal non-market risks to which we are subject are: credit risk, operational risk, liquidity risk, strategic risk and reputational risk. We are also subject to market risks. Market risk refers to potential losses arising from changes in interest rates, foreign exchange rates, equity prices, commodity prices and/or other relevant market rates or prices. Modest market risk arises from trading activities that serve customer needs, including hedging of interest rate and foreign exchange risk. As described below, more material market risk arises from our non-trading banking activities, such as loan origination and deposit gathering. We have established enterprise-wide policies and methodologies to identify, measure, monitor and report market risk. We actively manage both trading and non-trading market risks. We are also subject to liquidity risk, discussed under “—Liquidity.”

Our risk appetite framework and risk limit structure establishes guidelines to determine the balance between existing and desired levels of risk and supports the implementation, measurement and management of our risk appetite.

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Credit Risk

Overview

Credit risk represents the potential for loss arising from a customer, counterparty, or issuer failing to perform in accordance with the contractual terms of the obligation. While the majority of our credit risk is associated with lending activities, we do engage with other financial counterparties for a variety of purposes including investing, asset and liability management, and trading activities. Given the financial impact of credit risk on our earnings and balance sheet, the assessment, approval, and management of credit risk represents a major part of our overall risk-management responsibility.

Objective

The credit risk management organization is responsible for approving credit transactions, monitoring portfolio performance, identifying problem loans, and ensuring remedial management.

Organizational Structure

Management and oversight of credit risk is the responsibility of both the line of business and the second line of defense. The second line of defense, the independent Credit Risk Function, is led by the Chief Credit Officer who oversees all of our credit risk. The CCO reports to the Chief Risk Officer. The CCO, acting in a manner consistent with Board policies, has responsibility for, among other things, the governance process around policies, procedures, risk acceptance criteria, credit risk appetite, limits, and authority delegation. The CCO and his team also have responsibility for credit approvals for larger or more risky transactions and oversight of line of business credit risk activities. Reporting to the CCO are the heads of the second line of defense credit functions specializing in: Consumer Banking; Business Banking; Commercial Banking; Citizens Restructuring Management; Portfolio Analytics and Reporting; and Credit Policy and Administration. Each team under these leaders is composed of highly experienced credit professionals.

The credit risk teams operate independently from the business lines to ensure decisions are not influenced by unbalanced objectives.

Governance

The primary mechanisms used to govern our credit risk function are our consumer and commercial credit policies. These policies outline the minimum acceptable lending standards that align with our desired risk appetite. Material issues or changes are identified by the individual committees and presented to the Credit Policy Committee, Executive Risk Committee and the Board Risk Committee for approval as appropriate.

Key Management Processes

To ensure credit risks are managed within our risk appetite and business and risk strategies are achieved, we employ a comprehensive and integrated control program. The program’s objective is to proactively (1) identify, (2) measure, (3) monitor, and (4) mitigate existing and emerging credit risks across the credit lifecycle (origination, account management/portfolio management, and loss mitigation and recovery).

Consumer

On the consumer banking side of credit risk, our teams use models to evaluate consumer loans across the lifecycle of the loan. Starting at origination, credit scoring models are used to forecast the probability of default of an applicant. These models are embedded in the loan origination system, which allows for real-time scoring and automated decisions for many of our products. Periodic validations are performed on our purchased and proprietary scores to ensure fit for purpose. When approving customers for a new loan or extension of an existing credit line, credit scores are used in conjunction with other credit risk variables such as affordability, length of term, collateral value, collateral type, and lien subordination.

The origination process is supported by dedicated underwriting teams that reside in the business line. The size of each team depends on the intensity of the approval process as the number of handoffs, documentation, and verification requirements differ substantially depending on the loan product.

To ensure proper oversight of the underwriting teams, lending authority is granted by the second line of defense credit risk function to each underwriter. The amount of delegated authority depends on the experience of the individual. We periodically evaluate the performance of each underwriter and annually reauthorize their delegated authority. Only senior members of the second line of defense credit risk team are authorized to approve significant exceptions to credit policies. It is not uncommon to make exceptions to established policies when compensating factors are present. There are exception limits which, when reached, trigger a comprehensive analysis.

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Once an account is established, credit scores and collateral values are refreshed at regular intervals to allow for proactive identification of increasing or decreasing levels of credit risk. For accounts with contingent liability (revolving feature), credit policies have been developed that leverage the refreshed customer data to determine if a credit line should be increased, decreased, frozen, or closed. Lastly, behavioral modeling, segmentation, and loan modifications are used to cure delinquency, reduce the severity of loss, and maximize recoveries. Our approach to managing credit risk is highly analytical and, where appropriate, is automated, to ensure consistency and efficiency.

The credit risk team is constantly evaluating current and projected economic conditions, internal credit performance in relation to budget and predefined risk tolerances, and current and expected regulatory guidance to determine the optimal balance of expansion and contraction policies. All policy change proposals receive intense scrutiny and discussion prior to approval and implementation. This process ensures decisions are made based on risk-based analytics with full adherence to regulatory requirements.

Commercial

On the commercial banking side of credit risk, the structure is broken into C&I loans and leases and CRE. Within C&I there are separate verticals established for certain specialty products (e.g., asset-based lending, leasing, franchise finance, health care, technology, mid-corporate). A “specialty vertical” is a stand-alone team of industry or product specialists. Substantially all activity that falls under the ambit of the defined industry or product is managed through a specialty vertical when one exists. CRE also operates as a specialty vertical.

Commercial credit risk management begins with defined credit products and policies.

Commercial transactions are subject to individual analysis and approval at origination and, with few exceptions, are subject to a formal annual review requirement. The underwriting process includes the establishment and approval of Credit Grades that confirm the Probability of Default (“PD”) and Loss Given Default (“LGD”). Approval then requires both a business line approver and an independent Credit Approver with the requisite level of delegated authority. The approval level of a particular credit facility is determined by the size of the credit relationship as well as the PD. The checks and balances in the credit process and the independence of the credit approver function are designed to appropriately assess and sanction the level of credit risk being accepted, facilitate the early recognition of credit problems when they occur, and to provide for effective problem asset management and resolution. All authority to grant credit is delegated through the independent Credit Risk function and is closely monitored and regularly updated.

The primary factors considered in commercial credit approvals are the financial strength of the borrower, assessment of the borrower’s management capabilities, cash flows from operations, industry sector trends, type and sufficiency of collateral, type of exposure, transaction structure, and the general economic outlook. While these are the primary factors considered, there are a number of other factors that may be considered in the decision process. In addition to the credit analysis conducted during the approval process at origination and annual review, our Credit Quality Assurance group performs testing to provide an independent review and assessment of the quality of the portfolio and new originations. This group conducts portfolio reviews on a risk-based cycle to evaluate individual loans, validate risk ratings, as well as test the consistency of the credit processes and the effectiveness of credit risk management.

The maximum level of credit exposure to individual credit borrowers is limited by policy guidelines based on the perceived risk of each borrower or related group of borrowers. Concentration risk is managed through limits on industry (sector), loan type (asset class), and loan quality factors. We focus predominantly on extending credit to commercial customers with existing or expandable relationships within our primary markets (for this purpose defined as our 11 state footprint plus contiguous states), although we do engage in lending opportunities outside our primary markets if we believe that the associated risks are acceptable and aligned with strategic initiatives.

Apart from Industrials and CRE (which together make up 30% of the commercial outstandings as of March 31, 2016), there are no material sector concentrations. As of March 31, 2016, our CRE outstandings amounted to 9% of total loans and leases. The Industrial sector includes basic C&I lending focused on general manufacturing. The sector is diversified and not managed as a specialized vertical. Our customers are local to our market and present no significant concentration.

Our credit grading system considers many components that directly correlate to loan quality and likelihood of repayment. Our assessment of a borrower’s credit strength is reflected in our risk ratings for such loans, which are also an integral component of our ALLL methodology. When deterioration in credit strength is noted, a loan becomes subject to Watch Review. The Watch Review process involves senior representatives from the business line portfolio management team, the independent Credit Risk team, and our Citizens Restructuring Management group. As appropriate and consistent with regulatory definitions, the credit may be subject to classification as either Criticized or Classified, which would also trigger a credit rating downgrade. As such, the loan and relationship would be subject to more frequent review.

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Substantially all loans categorized as Classified are managed by Citizens Restructuring Management, a specialized group of credit professionals that handles the day-to-day management of workouts, commercial recoveries, and problem loan sales. Its responsibilities include developing and implementing action plans, assessing risk ratings, determining the appropriateness of specific reserves relating to the loan, accrual status of the loan, and the ultimate collectability of loans in their portfolio.

Market Risk

Market risk refers to potential losses arising from changes in interest rates, foreign exchange rates, equity prices, commodity prices and/or other relevant market rates or prices. Modest market risk arises from trading activities that serve customer needs, including hedging of interest rate and foreign exchange risk. As described below, more material market risk arises from our non-trading banking activities, such as loan origination and deposit-gathering. We have established enterprise-wide policies and methodologies to identify, measure, monitor and report market risk. We actively manage both trading and non-trading market risks.

Non-Trading Risk

We are exposed to market risk as a result of non-trading banking activities. This market risk is composed entirely of interest rate risk, as we have no direct currency or commodity risk and de minimis equity risk. This interest rate risk emerges from the balance sheet after the aggregation of our assets, liabilities and equity. We refer to this non-trading risk embedded in the balance sheet as “structural interest rate risk” or “interest rate risk in the banking book.” Our mortgage servicing rights assets also contain interest rate risk as the value of the fee stream is impacted by the level of long-term interest rates.

A major source of structural interest rate risk is a difference in the repricing of assets, on the one hand, and liabilities and equity, on the other. First, there are differences in the timing of rate changes reflecting the maturity and/or repricing of assets and liabilities. For example, the rate earned on a residential mortgage may be fixed for 30 years; the rate paid on a certificate of deposit may be fixed only for a few months. Due to these timing differences, net interest income is sensitive to changes in the level and shape of the yield curve. Second, there are differences in the drivers of rate changes of various assets and liabilities. For example, commercial loans may reprice based on one-month LIBOR or prime; the rate paid on retail money market demand accounts may be only loosely correlated with LIBOR and depend on competitive demand for funds. Due to these basis differences, net interest income is sensitive to changes in spreads between certain indices or repricing rates.

Another important source of structural interest rate risk relates to the potential exercise of explicit or embedded options. For example, most consumer loans can be prepaid without penalty; and most consumer deposits can be withdrawn without penalty. The exercise of such options by customers can exacerbate the timing differences discussed above.

A primary source of our structural interest rate risk relates to faster repricing of floating rate loans relative to the retail deposit funding. This source of asset sensitivity is concentrated at the short end of the yield curve. For the past seven years with the Federal Funds rate near zero, this risk has been asymmetrical with significantly more upside benefit than potential exposure. Exposure to declining rates has lessened modestly in the first quarter given decreased market expectations for additional FOMC actions. The secondary source of our interest rate risk is driven by longer term rates comprising the rollover or reinvestment risk on fixed rate loans as well as the prepayment risk on mortgage related loans and securities funded by non-rate sensitive deposits and equity.

The primary goal of interest rate risk management is to control exposure to interest rate risk within policy limits approved by the Board. These limits and guidelines reflect our tolerance for interest rate risk over both short-term and long-term horizons. To ensure that exposure to interest rate risk is managed within this risk appetite, we must both measure the exposure and, as necessary, hedge it. The Treasury Asset and Liability Management team is responsible for measuring, monitoring and reporting on the structural interest rate risk position. These exposures are reported on a monthly basis to the Asset and Liability Committee (ALCO) and at Board meetings.

We measure structural interest rate risk through a variety of metrics intended to quantify both short-term and long-term exposures. The primary method that we use to quantify interest rate risk is simulation analysis in which we model net interest income from assets, liabilities and hedge derivative positions under various interest rate scenarios over a three-year horizon. Exposure to interest rate risk is reflected in the variation of forecasted net interest income across scenarios.

Key assumptions in this simulation analysis relate to the behavior of interest rates and spreads, the changes in product balances and the behavior of loan and deposit clients in different rate environments. The most material of these behavioral assumptions relate to the repricing characteristics and balance fluctuations of deposits with indeterminate (i.e., non-contractual) maturities as well as the pace of mortgage prepayments. Assessments are periodically made by running sensitivity analysis of the impact of key assumptions. The results of these analyses are reported to ALCO.

As the future path of interest rates cannot be known in advance, we use simulation analysis to project net interest income under various interest rate scenarios including a “most likely” (implied forward) scenario as well as a variety of deliberately extreme and perhaps unlikely scenarios. These scenarios may assume gradual ramping of the overall level of interest rates, immediate

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shocks to the level of rates and various yield curve twists in which movements in short- or long-term rates predominate. Generally, projected net interest income in any interest rate scenario is compared to net interest income in a base case where market forward rates are realized.

The table below reports net interest income exposures against a variety of interest rate scenarios. Exposures are measured as a percentage change in net interest income over the next year due to either instantaneous, or gradual parallel +/- 200 basis point moves in benchmark interest rates. The net interest income simulation analyses do not include possible future actions that management might undertake to mitigate this risk. The current limit is a decrease in net interest income of 10% related to an instantaneous +/- 200 basis point move. As the table illustrates, our balance sheet is asset-sensitive: net interest income would benefit from an increase in interest rates. Exposure to a decline in interest rates is well within limit. It should be noted that the magnitude of any possible decline in interest rates is constrained by the low absolute starting levels of rates. While an instantaneous and severe shift in interest rates was used in this analysis, we believe that any actual shift in interest rates would likely be more gradual and would therefore have a more modest impact.

The table below summarizes our positioning in various parallel yield curve shifts:

	Estimated % Change in Net Interest Income over 12 Months
Basis points	March 31, 2016		December 31, 2015
Instantaneous Change in Interest Rates
+200	13.7	%	10.6	%
+100	7.0		5.8
-100	(4.9	)	(5.8	)
-200	(5.1	)	(6.4	)
Gradual Change in Interest Rates
+200	6.9		6.1
+100	3.5		3.2
-100	(3.3	)	(3.1	)
-200	(4.4	)	(4.6	)

As part of the routine risk management process, a wide variety of similar analysis are reported for each of the next three rolling years.

We also use a valuation measure of exposure to structural interest rate risk, Economic Value of Equity (“EVE”), as a supplement to net interest income simulations. EVE complements net interest income simulation analysis as it estimates risk exposure over a long-term horizon. EVE measures the extent to which the economic value of assets, liabilities and off-balance sheet instruments may change in response to fluctuation in interest rates. This analysis is highly dependent upon assumptions applied to assets and liabilities with non-contractual maturities. The change in value is expressed as a percentage of regulatory capital. The current risk limit is set at a decrease of 20% of regulatory capital given an instantaneous +/- 200 basis point change in interest rates. We are operating within that limit as of March 31, 2016.

We are asset sensitive and as such are positioned to benefit from an increase in interest rates. We have consistently maintained the level of overall asset sensitivity in a tight range of 6.1% to 7.2% over the past year, as defined by the +200 gradual change. Quarter over quarter, the level of asset sensitivity has increased toward the higher end of the range. The increase is primarily attributable to the unwinding of $3 billion of receive-fixed interest rate swaps in February 2016 to take advantage of market conditions.

We also had market risk associated with the value of the mortgage servicing right assets, which are impacted by the level of interest rates. As of March 31, 2016 and December 31, 2015, our mortgage servicing rights had a book value of $155 million and $164 million, respectively, and were carried at the lower of cost or fair value. As of March 31, 2016, and December 31, 2015, the fair value of the mortgage servicing rights was $168 million and $178 million respectively. Given low interest rates over recent years, there is a valuation allowance of $14 million and $9 million on the asset as of March 31, 2016 and December 31, 2015, respectively. Depending on the interest rate environment, hedges may be used to stabilize the market value of the mortgage servicing right asset.

Trading Risk

We are exposed to market risk primarily through client facilitation activities including derivatives and foreign exchange products. Exposure is created as a result of changes in interest rates and related basis spreads and volatility, foreign exchange rates,

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and credit spreads on a select range of interest rates, foreign exchange and secondary loans instruments. These trading activities are conducted through our two banking subsidiaries, CBNA and CBPA.

Client facilitation activities consist primarily of interest rate derivatives and foreign exchange contracts where we enter into offsetting trades with a separate counterparty or exchange to manage our market risk exposure. We will occasionally execute hedges against the spread that exists across the client facing trade and its offset in the market to maintain a low risk profile. In addition to the aforementioned activities, we operate a secondary loan trading desk with the objective to meet secondary liquidity needs of our issuing clients’ transactions and investor clients. We do not engage in any trading activities with the intent to benefit from short term price differences.

We record interest rate derivatives and foreign exchange contracts as derivative assets and liabilities on our Consolidated Balance Sheets. Trading assets and liabilities are carried at fair value with income earned related to these activities included in net interest income. Changes in fair value of trading assets and liabilities are reflected in other income, a component of noninterest income on the unaudited interim Consolidated Statements of Operations.

Market Risk Governance

Our market risk framework currently leverages RBS technology platform to aggregate, measure and monitor exposure against market risk limits. As part of our separation from RBS, we have entered into a Transitional Services Agreement pursuant to which RBS will continue to provide us with all necessary VaR and other risk measurements required for regulatory reporting related to interest rate derivatives and foreign exchange trading activities, as well as internal market risk reporting until the end of the Transitional Services Agreement. During the term of the Transitional Services Agreement, we are building out our own market risk organization and framework in order to gradually migrate away from reliance on services provided by RBS.

Given the low level of traded market risk, we have received the support of our U.S. banking regulators for relying on RBS’ market risk technology platform. In managing our market risk, dealing authorities represent a key control in the management of market risk by setting the scope within which the business is permitted to operate. Dealing authorities are established jointly by designated senior business line and senior risk manager, and are reviewed at least annually. Dealing authorities are structured to accommodate the client facing trades, market offset trades and sets of hedges needed to maintain a low risk profile. Primary responsibility for keeping within established tolerances resides with the business. Key risk indicators, including a combined VaR for interest rate and foreign exchange rate risk, are monitored on a daily basis and reported against tolerances consistent with our risk appetite and business strategy to relevant business line management and risk counterparts.

Market Risk Measurement

We use VaR metrics, complemented with sensitivity analysis, market value and stress testing in measuring market risk. During the term of the Transition Services Agreement, we will continue to leverage RBS market risk measurement models for our foreign exchange and interest rate products, which are described further below, that capture correlation effects and allow for aggregation of market risk across risk types, business lines and legal entities. We measure and monitor market risk for both management and regulatory capital purposes.

Value-at-Risk Overview

    The market risk measurement model is based on historical simulation. The VaR measure estimates the extent of any fair value losses on trading positions that may occur due to broad market movements (General VaR) such as changes in the level of interest rates, foreign exchange rates, equity prices and commodity prices. It is calculated on the basis that current positions remain broadly unaltered over the course of a given holding period. It is assumed that markets are sufficiently liquid to allow the business to close its positions, if required, within this holding period. VaR’s benefit is that it captures the historic correlations of a portfolio. Based on the composition of our “covered positions,” we also use a standardized add-on approach for the loan trading desk’s Specific Risk capital which estimates the extent of any losses that may occur from factors other than broad market movements. In addition, for our secondary traded loans we calculate the VaR on the general interest rate risk embedded within the loans using a standalone model that replicates The general VaR methodology (the related capital is reflected on the “de minimis” line in the following section). The General VaR approach is expressed in terms of a confidence level over the past 500 trading days. The internal VaR measure (used as the basis of the main VaR trading limits) is a 99% confidence level with a one day holding period, meaning that a loss greater than the VaR is expected to occur, on average, on only one day in 100 trading days (i.e., 1% of the time). Theoretically, there should be a loss event greater than VaR two to three times per year. The regulatory measure of VaR is done at a 99% confidence level with a 10-day holding period. The historical market data applied to calculate the VaR is updated on a 10 business day lag. Refer to “Market Risk Regulatory Capital” below for details of our 10-day VaR metrics for the quarters ended March 31, 2016 and 2015, including high, low, average and period end Value-at-Risk for interest rate and foreign exchange rate risks, as well as total VaR.

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Market Risk Regulatory Capital

Effective January 1, 2013, the U.S. banking regulators adopted “Risk-Based Capital Guidelines: Market Risk” as the regulations covering the calculation of market risk capital (the “Market Risk Rule”). The Market Risk Rule, commonly known as Basel 2.5, substantially modified the determination of market risk-weighted assets and implemented a more risk sensitive methodology for the risk inherent in certain trading positions categorized as “covered positions.” For the purposes of the market risk rule, all of our client facing trades, market offset trades and sets of hedges needed to maintain a low risk profile to qualify as “covered positions.” The internal VaR measure is calculated based on the same population of trades that is utilized for regulatory VaR. The following table shows the results of our modeled and non-modeled measures for regulatory capital calculations:

(in millions)	For the Quarter Ended March 31, 2016								For the Quarter Ended December 31, 2015
Market Risk Category	Period End		Average		High		Low		Period End		Average		High		Low
Interest Rate		$—		$—		$—		$—		$—		$—		$—		$—
Foreign Exchange Currency Rate	—		—		—		—		—		—		—		—
Diversification Benefit	—		—		NM(1)		NM(1)		—		—		NM(1)		NM(1)
General VaR	—		—		1		—		—		—		—		—
Specific Risk VaR	—		—		—		—		—		—		—		—
Total VaR		$—		$—		$—		$—		$—		$—	—			$—
Stressed General VaR		$2		$3		$5		$2		$2		$2		$2		$1
Stressed Specific Risk VaR	—		—		—		—		—		—		—		—
Total Stressed VaR		$2		$3		$5		$2		$2		$2		$2		$1
Market Risk Regulatory Capital		$11								$7
Specific Risk Not Modeled Add-on	5								5
de Minimis Exposure Add-on	13								15
Total Market Risk Regulatory Capital		$29								$27
Market Risk-Weighted Assets		$357								$333

⁽¹⁾ The high and low for the portfolio may have occurred on different trading days than the high and low for the components. Therefore, there is no diversification benefit shown for the high and low columns.

Stressed VaR

SVaR is an extension of VaR, but uses a longer historical look back horizon that is fixed from January 3, 2005. This is done not only to identify headline risks from more volatile periods, but also to provide a counter balance to VaR which may be low during periods of low volatility. The holding period for profit and loss determination is 10 days. SVaR is also a component of market risk regulatory capital. SVaR for us is calculated under its own dynamic window regime as compared to RBS’ static SVaR window. In a dynamic window regime, values of the 10-day, 99% VaR are calculated over all possible 260-day periods that can be obtained from the complete historical data set. Refer to “Market Risk Regulatory Capital” above for details of SVaR metrics, including high, low, average and period end SVaR for the combined portfolio.

Sensitivity Analysis

Sensitivity analysis is the measure of exposure to a single risk factor, such as a one basis point change in rates or credit spread. We conduct and monitor sensitivity on interest rates, basis spreads, foreign exchange exposures and option prices. Whereas VaR is based on previous moves in market risk factors over recent periods, it may not be an accurate predictor of future market moves. Sensitivity analysis complements VaR as it provides an indication of risk relative to each factor irrespective of historical market moves and is an effective tool in evaluating the appropriateness of hedging strategies.

Stress Testing

Conducting a stress test of a portfolio consists of running risk models with the inclusion of key variables that simulate various historical or hypothetical scenarios. For historical stress tests, profit and loss results are simulated for selected time periods corresponding to the most volatile underlying returns while hypothetical stress tests aim to consider concentration risk, illiquidity under stressed market conditions and risk arising from the bank’s trading activities that may not be fully captured by its other models. Hypothetical scenarios also assume that the market moves happen simultaneously and that no repositioning or hedging activity takes place to mitigate losses as events unfold. We generate stress tests of our trading positions on a regular basis. For example, we currently include a stress test that simulates a Lehman-type crisis scenario by taking the worst 10-day peak to trough moves for the various risk factors that go into VaR from that period, and assumes they occurred simultaneously.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

VaR Model Review and Validation

Market risk measurement models used are independently reviewed. The models, used under the Transitional Services Agreement, are subject to ongoing and independent review and validation that focuses on the model methodology. Independent review of market risk measurement models is the responsibility of RBS Risk Analytics. Aspects covered include challenging the assumptions used, the quantitative techniques employed and the theoretical justification underpinning them, and an assessment of the soundness of the required data over time. Where possible, the quantitative impact of the major underlying modeling assumptions will be estimated (e.g., through developing alternative models). Results of such reviews are shared with U.S. regulators. For the term of the Transitional Services Agreement, we and RBS expect to utilize the same independently validated VaR model for both management and regulatory reporting purposes. RBS market risk teams, including those providing consultative services to us under the Transitional Services Agreement, will conduct internal validation before a new or changed model element is implemented and before a change is made to a market data mapping. For example, RBS market risk teams also perform regular reviews of key risk factors that are used in the market risk measurement models to produce profit and loss vectors used in the VaR calculations. These internal validations are subject to independent re-validation by RBS Risk Analytics and, depending on the results of the impact assessment, notification to the appropriate regulatory authorities for RBS and us may be required.

VaR Backtesting

Backtesting is one form of validation of the VaR model. The Market Risk Rule requires a comparison of our internal VaR measure to the actual net trading revenue (excluding fees, commissions, reserves, intra-day trading and net interest income) for each day over the preceding year (the most recent 250 business days). Any observed loss in excess of the VaR number is taken as an exception. The level of exceptions determines the multiplication factor used to derive the VaR and SVaR-based capital requirement for regulatory reporting purposes. We perform sub-portfolio backtesting as required under the Market Risk Rule, and as approved by our banking regulators, for interest rate and foreign exchange positions. The following table shows our daily net trading revenue and total internal, modeled VaR for the quarters ended March 31, 2016, December 31, 2015, September 30, 2015 and June 30, 2015. Beginning in the quarter ended September 30, 2015, as agreed with our banking regulators, we use a multiplication factor derived from our specific backtesting results and no longer that of RBS.

Daily VaR Backtesting: Sub-portfolio Level Backtesting

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CITIZENS FINANCIAL GROUP, INC.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information presented in the “Market Risk” section of Part I, Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations and is incorporated herein by reference.

ITEM 4. CONTROLS AND PROCEDURES

The Company maintains a set of disclosure controls and procedures designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. The design of any disclosure controls and procedures is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives. In accordance with Rule 13a-15(b) of the Exchange Act, as of the end of the period covered by this quarterly report, an evaluation was carried out under the supervision and with the participation of the Company’s management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of its disclosure controls and procedures. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures, as of the end of the period covered by this quarterly report, were effective to provide reasonable assurance that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and is accumulated and communicated to the Company’s management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

There were no changes in our internal control over financial reporting identified in management's evaluation pursuant to Rules13a-15(d) or 15d-15(d) of the Exchange Act during the period covered by this quarterly report on Form 10-Q that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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CITIZENS FINANCIAL GROUP, INC.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

In addition to the matters described in the Company's Form 10-K for the year ended December 31, 2015, information required by this item is set forth in Note 12 “Commitments and Contingencies” in the Notes to the unaudited interim Consolidated Financial Statements in Part I, Item 1 — Financial Statements of this report, which is incorporated herein by reference.

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this report, you should consider the risks described under the caption “Risk Factors” in the Company’s Form 10-K for the year ended December 31, 2015.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None during the three month period ended March 31, 2016.

ITEM 5. OTHER INFORMATION

As previously disclosed in our proxy statements, the Company planned to enter into an amended employment agreement with Bruce Van Saun, its Chief Executive Officer and Chairman, following its separation from RBS when UK and European remuneration regulations ceased to apply to the Company. At the request of the Compensation and Human Resources Committee of the Board of Directors (the “Compensation Committee”), on May 5, 2016, Mr. Van Saun entered into an amended employment agreement with the Company, effective immediately. This agreement supersedes the prior employment agreement between Mr. Van Saun and the Company dated October 1, 2013 and his offer letter dated November 6, 2013, which were entered into prior to the Company’s IPO when the Company was a wholly-owned subsidiary of RBS. The Company’s objective was to put in place an arrangement that balances its current obligations under Mr. Van Saun’s prior agreement and achieves the following positive results for the Company: 1) motivates and rewards Mr. Van Saun for the achievement of our strategic objectives; 2) provides additional retentive value; and 3) aligns terms and conditions more closely with U.S. market practices, including the elimination of Mr. Van Saun’s role-based allowance and pension benefit funding.

Mr. Van Saun’s employment agreement has an initial term of five years, which will be automatically renewed for an additional two-year term unless notice is provided by either party at least twelve months prior to the expiration of the initial term. Mr. Van Saun’s annual base salary will remain at $1,487,000 and he will have a target annual variable compensation opportunity of $6,013,000, a portion of which will be delivered as short-term cash incentive and a portion of which will be delivered in long-term equity awards. The total target compensation is consistent with Mr. Van Saun’s peer CEO median, and approximates Mr. Van Saun’s pay over the past two years. The amount of Mr. Van Saun’s variable compensation and the mix between short-term cash and long-term equity awards will be determined by the Compensation Committee.

In addition, the agreement provides that in 2016 Mr. Van Saun will be granted a one-time equity-based award with an approximate grant date value of $3 million, half of which will be subject to a three-year time-based cliff vest and half of which will be subject to the satisfaction of performance-based conditions over a three-year performance period. This award will serve to further align Mr. Van Saun with the strategic objectives of the Company and will provide additional retentive value. As a result of being granted this award, Mr. Van Saun will no longer be paid annual pension benefit funding of $562,000, which was provided under his previous employment agreement.

The agreement further provides that in the event of Mr. Van Saun’s termination by the Company without cause, non-renewal after the initial term, or his resignation with good reason, he will receive cash severance equal to two times his base salary as well as a pro-rata portion of his target cash incentive for the year in which termination occurs, and unvested annual awards will remain outstanding and continue to vest on their original schedule (with performance-based awards subject to actual performance). In the event that such termination occurs within 24 months following a change of control, Mr. Van Saun will receive cash severance equal to three times the sum of his base salary and target cash incentive, as well as a pro-rata portion of his target cash incentive for the year in which termination occurs, with performance-based awards achieving the target level of performance upon a change of control and unvested awards fully vesting upon such termination.

In the event of Mr. Van Saun’s voluntary resignation, the parties would mutually agree at the time of termination how a pro-rata portion of his variable compensation (excluding performance-based awards) for the year in which termination occurs will be payable. In addition, unvested annual awards will remain outstanding and continue to vest on their original schedule (with performance-based awards subject to actual performance). If Mr. Van Saun’s employment is terminated by reason of his death,

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CITIZENS FINANCIAL GROUP, INC.

his estate will be entitled to receive base salary through the end of the month in which his death occurs as well as a pro-rata target cash incentive for the year in which death occurs, with time-based unvested awards fully vesting and performance-based unvested awards fully vesting at the target level.

If Mr. Van Saun is terminated without cause or he resigns for good reason, he is subject to restrictive covenants prohibiting him from becoming employed with specified financial services companies for six months and is prohibited from solicitation of employees and solicitation of customers and prospective clients for twelve months.

The above summary is qualified in its entirety by the terms and conditions set forth in the agreement filed as Exhibit 10.5 to this quarterly report on Form 10-Q.

ITEM 6. EXHIBITS

3.1 Amended and Restated Certificate of Incorporation of the Registrant as in effect on the date hereof (incorporated herein by reference to Exhibit 3.1 of the Quarterly Report on Form 10-Q, filed November 14, 2014)

3.2 Bylaws of the Registrant (as amended and restated on February 13, 2015) (incorporated herein by reference to Exhibit 3.1 of the Current Report on Form 8-K, filed February 17, 2015)

10.1 Citizens Financial Group, Inc. 2014 Omnibus Incentive Plan Form of Performance Share Award Agreement for 2016 Awards†*

10.2 Citizens Financial Group, Inc. 2014 Omnibus Incentive Plan Restricted Stock Unit Award Agreement between the Registrant and Bruce Van Saun relating to the May 2016 Grant†*

10.3 Citizens Financial Group, Inc. 2014 Omnibus Incentive Plan Performance Share Unit Award Agreement between the Registrant and Bruce Van Saun for the May 2016 Grant†*

10.4 Executive Employment Agreement, dated March 18, 2016, between the Registrant and Randall Black†*

10.5 Amended and Restated Executive Employment Agreement, dated May 5, 2016, between the Registrant and Bruce Van Saun†*

11.1 Statement re computation of earnings per share (filed herewith as Note 19 to the unaudited interim Consolidated Financial Statements in Part I, Item 1 — Financial Statements of this report, which is incorporated herein by reference)

12.1 Computation of Ratio of Earnings to Fixed Charges*

12.2 Computation of Ratio of Earnings to Fixed Charges and Preferred Dividends*

31.1    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

31.2    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

32.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

101 The following materials from the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2016, formatted in XBRL: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Changes in Stockholders’ Equity, (v) the Consolidated Statements of Cash Flows and (vi) the Notes to Consolidated Financial Statements*

† Indicates management contract or compensatory plan or arrangement.

* Filed herewith.

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CITIZENS FINANCIAL GROUP, INC.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on May 9, 2016.

CITIZENS FINANCIAL GROUP, INC.
(Registrant)
By:	/s/ Eric W. Aboaf
	Name: Eric W. Aboaf
	Title: Executive Vice President and Chief Financial Officer
	(Principal Financial Officer)

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EX-10.1

EXHIBIT 10.1

CITIZENS FINANCIAL GROUP, INC.
2014 OMNIBUS INCENTIVE PLAN

Performance Share Unit Award Agreement (2016 Annual Grant)
Terms and Conditions

Unless defined in this award agreement (this “Award Agreement”), capitalized terms shall have the meanings assigned to them in the Citizens Financial Group, Inc. 2014 Omnibus Incentive Plan (the “Plan”). In the event of a conflict among the provisions of the Plan and this Award Agreement, the provisions of the Plan shall prevail.

Section 1.Grant of PSU Award. Citizens Financial Group, Inc. (together with its Subsidiaries, the “Company”) has granted to the Participant (the “Participant”) an award (the “Award”) of the target number of performance share units specified in the Participant’s electronic account, effective on the “Grant Date” specified in the Participant's electronic account. The Award is subject to the terms and conditions of the Plan and this Award Agreement. The Award is granted under the Plan, the provisions of which are incorporated herein by reference and made a part of this Award Agreement.

Section 2.    Issuance of PSUs. Each performance share unit (“PSU”) shall represent the right to receive one Share upon the vesting of such PSU, as determined in accordance with and subject to the terms of this Award Agreement and the Plan. The number of PSUs that the Participant will actually earn will be determined in accordance with Exhibit I of this Award Agreement.

Section 3.    Rights as a Shareholder; Dividend Equivalents.

(a)    The Participant shall have no voting rights or any other rights as a shareholder of the Company with respect to the PSUs unless and until the Participant becomes the record owner of the Shares underlying such PSUs.

(b)    If a dividend is declared on Shares during the period commencing on the Grant Date (including such date) and ending on the date on which the Shares underlying PSUs are distributed to the Participant pursuant to Section 7, the Participant shall be credited with dividend equivalents in the form and in an amount equal to the dividend that the Participant would have received had the Shares underlying the PSUs been distributed to the Participant as of the time at which such dividend is paid. Dividend equivalents will be subject to the same vesting and forfeiture restrictions as the PSUs to which they are attributable and will be paid on the same date that the PSUs to which they are attributable are settled in accordance with Section 7.

Section 4.    Restrictions on Transferability. The PSUs granted hereunder shall not be assigned, sold, exchanged, pledged, hypothecated, transferred, alienated or otherwise disposed of or hedged, in any manner (including through the use of any cash-settled instrument), whether voluntarily or involuntarily, and whether by operation of law or otherwise, other than by will or by the laws of descent and distribution, by the Participant. Any sale, exchange, transfer, assignment, pledge, hypothecation, or other disposition in violation of the provisions of this Section 4 shall be null and void and any PSU which is hedged in any manner shall immediately be forfeited. All of the terms and conditions of the Plan and this Award Agreement shall be binding upon any permitted successors and assigns.

Section 5.    Performance Assessment.

(a)    Except in the event of a Change of Control, the number of PSUs earned by the Participant for the Performance Period will be determined in accordance with Exhibit I. The Committee shall determine, in its sole discretion, the number of PSUs earned by the Participant.

1

EXHIBIT 10.1

(b)    Promptly following the end of the Performance Period (and no later than 60 days following the end of the Performance Period), the Committee will review and certify in writing (i) whether, and to what extent, performance has been achieved in accordance with Exhibit I, and (ii) the number of PSUs that the Participant shall earn, if any, subject to compliance with the requirements of Section 6. The Committee’s certification shall be final, conclusive and binding on the Participant, and on all other persons, to the maximum extent permitted by law.

Section 6.    Vesting; Change of Control; Vesting and Forfeiture Upon a Termination of Employment.

(a)    Vesting. The number of PSUs earned by the Participant, if any, determined as set forth in Section 5(b), will vest and become nonforfeitable following the end of the Performance Period on the vesting date identified in the Participant's electronic account (the “Vesting Date”), subject to the Participant’s continued service from the Grant Date through the Vesting Date.

(b)    Change of Control. In the event of a Change of Control prior to the end of the Performance Period:

i.The Committee will review and certify in writing whether, and to what extent, performance has been achieved through the date of the Change of Control, and the number of PSUs that the Participant shall earn, if any, subject to compliance with the requirements of this Section 6(b). The Committee’s certification shall be final, conclusive and binding on the Participant, and on all other persons, to the maximum extent permitted by law.

ii.Following the Change of Control, the PSUs will remain subject to forfeiture and conditioned on the Participant’s continued service from the Grant Date through the Vesting Date; provided, however, that if the Participant is terminated by the Company without Cause, or the Participant resigns from employment with the Company with Good Reason, within 12 months after the Change of Control (a “Change of Control Termination”), the PSUs earned by the Participant, as determined by the Committee pursuant to Section 6(b)(i), shall fully vest on the Participant’s termination date and shall be distributed to the Participant in accordance with Section 7.

(c)    Vesting and Forfeiture Upon Termination of Employment.

i.Termination Without Cause. If the Participant is terminated by the Company without Cause (other than a Change of Control Termination) on or after the first anniversary of the Performance Period Start Date, the PSUs earned by the Participant as set forth in Section 5(b) shall vest on the Vesting Date in accordance with Section 6(a) as though the Participant was still employed by the Company through the Vesting Date; provided, however, that the Participant does not engage in any Detrimental Activity during the Participant’s post-employment vesting period.

ii.Retirement; Disability. If the Participant's employment is terminated by reason of Retirement or Disability [on or after the first anniversary of the Performance Period Start Date]¹, the PSUs earned by the Participant as set forth in Section 5(b) shall vest on the Vesting Date in accordance with Section 6(a) as though the Participant was still employed by the Company through the Vesting Date; provided, however, that the Participant (A) does not engage in any Detrimental Activity and (B) does not become employed by any company in the financial services industry, in each case, during the Participant’s post-employment vesting period.

¹Bracketed language will not apply to Nancy Shanik and certain other officers.

2

EXHIBIT 10.1

iii.Death. If the Participant is terminated due to death, the target number of PSUs shall fully vest on the Participant’s date of death and shall be distributed to the Participant’s Beneficiary in accordance with Section 7.

iv.Forfeiture. If the Participant is terminated by the Company with Cause or the Participant resigns for any reason (other than a Change of Control Termination), any unvested PSUs shall be forfeited in their entirety on the Participant’s termination date without any payment to the Participant. If the Participant’s employment is terminated by the Company without Cause (other than a Change of Control Termination) or the Participant’s employment is terminated due to Retirement or Disability, in any event prior to the first anniversary of the Performance Period Start Date, any unvested PSUs shall be forfeited in their entirety on the Participant’s termination date without any payment to the Participant. In addition, if (A) the Participant’s employment is terminated by the Company without Cause (other than a Change of Control Termination) and the Participant engages in any Detrimental Activity during the Participant’s post-employment vesting period, or (B) the Participant’s employment is terminated due to Retirement or Disability and the Participant either (I) engages in any Detrimental Activity, or (II) becomes employed by any company in the financial services industry, in either case, during the Participant’s post-employment vesting period, any unvested PSUs shall be forfeited in their entirety on the date that the Participant engages in such Detrimental Activity or becomes employed by any company in the financial services industry, as applicable, without any payment to the Participant.

Section 7.    Distribution on Vesting. Subject to the provisions of this Award Agreement, upon the vesting of any of the PSUs, the Company shall deliver to the Participant (or the Participant’s Beneficiary, in the event of the Participant’s death prior to distribution), as soon as reasonably practicable after the applicable Vesting Date (or the Participant’s termination date, as applicable), one Share for each PSU, provided that such delivery of Shares shall be made no later than March 15 of the calendar year immediately following the year in which the applicable Vesting Date (or the Participant’s termination date, as applicable) occurs. Upon such delivery, such Shares shall be fully assignable, saleable and transferable by the Participant, provided that any such assignment, sale, transfer or other alienation with respect to such Shares shall be in accordance with applicable securities laws.

Section 8.    Tax Liability; Withholding Requirements. The Participant shall be solely responsible for any applicable taxes (including, without limitation, income and excise taxes) and penalties, and any interest that accrues thereon, that the Participant incurs in connection with the receipt, vesting or settlement of any PSU granted hereunder. The Company shall be authorized to withhold from the Award the amount (in cash or Shares, or any combination thereof) of applicable withholding taxes due in respect of the Award, its settlement or any payment or transfer under the Award and to take such other action (including providing for elective payment of such amounts in cash or other property by the Participant) as may be necessary in the opinion of the Company to satisfy all obligations for the payment of such taxes; provided, however, that no Shares shall be withheld with a value exceeding the minimum amount of tax required to be withheld by law.

Section 9.    Recoupment/Clawback. The Participant hereby acknowledges and agrees that in order to comply with applicable law (including, without limitation, the Dodd-Frank Wall Street Reform and Consumer Protection Act) and policies of the Company, the Committee retains the right at all times to decrease or terminate all awards and payments under the Plan, and any and all amounts payable under the Plan, or paid under the Plan, shall be subject to clawback, forfeiture, and reduction to the extent determined necessary to comply with applicable law and/or policies of the Company, including as a result of risk-related events.

Section 10.    No Right to Continued Employment.Neither the Plan nor this Award Agreement shall confer upon the Participant any right to continue to be employed by the Company and the receipt of the Award does not confer any rights on the Participant other than those expressly set forth in this Award Agreement or the Plan.

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EXHIBIT 10.1

Section 11.    Section 409A of the Code. This Award Agreement is intended to comply with the requirements of Section 409A of the Code and the regulations thereunder, and the provisions of this Award Agreement shall be interpreted in a manner that satisfies the requirements of Section 409A of the Code, and this Award Agreement shall be operated accordingly. If any provision of this Award Agreement or any term or condition of the PSUs would otherwise conflict with this intent, the provision, term or condition shall be interpreted and deemed amended so as to avoid this conflict. Notwithstanding anything else in this Award Agreement, if the Board considers a Participant to be a “specified employee” under Section 409A of the Code at the time of such Participant’s “separation from service” (as defined in Section 409A of the Code), and the amount hereunder is “deferred compensation” subject to Section 409A of the Code any distribution that otherwise would be made to such Participant with respect to PSUs as a result of such separation from service shall not be made until the date that is six months after such separation from service, except to the extent that earlier distribution would not result in such Participant’s incurring interest or additional tax under Section 409A of the Code. If the Award includes a “series of installment payments” (within the meaning of Section 1.409A-2(b)(2)(iii) of the Treasury Regulations), the Participants’ right to the series of installment payments shall be treated as a right to a series of separate payments and not as a right to a single payment. Notwithstanding the foregoing, the tax treatment of the benefits provided under this Award Agreement is not warranted or guaranteed, and in no event shall the Company be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by the Participant on account of non-compliance with Section 409A of the Code.

Section 12.    Miscellaneous.

(a)    Definitions. For purposes of this Award Agreement:

i.“Cause” means:

(1)     any conviction (including a plea of guilty or of nolo contendere or entry into a pre-trial diversion program) of the Participant for the commission of a felony or any conviction of any criminal offense within the scope of Section 19 of the Federal Deposit Insurance Act, 12 U.S.C. § 1829;

(2)     the Participant commits an act of gross misconduct, fraud, embezzlement, theft or material dishonesty in connection with the Participant’s duties or in the course of the Participant’s employment with the Company or any of its affiliates;

(3)     failure on the part of the Participant to perform his or her employment duties in any material respect, which is not cured to the reasonable satisfaction of the Company within 30 days after the Participant receives written notice of such failure; or

(4)     the Participant engages in Detrimental Activity.

ii. “Detrimental Activity” includes the following:

(1)     The Participant’s disclosure to any unauthorized person, firm, or corporation or use or attempt to use for his or her own advantage or to the advantage of any other person, firm or corporation, any confidential information relating to the business affairs or trade secrets of the Company or any of its affiliates, howsoever obtained or provided, during the course of, or as a result of, his or her employment (the “Confidential Information”). Confidential Information includes, but is not limited to, information relating to employees, customers and suppliers (former, actual and potential), Company contracts, pricing structures, financial and marketing details, business plans, any technical data, designs, formulae, product lines, intellectual property, research activities and any information which may be deemed to be commercially or price sensitive in nature, whether printed, typed, handwritten, videotaped,

4

EXHIBIT 10.1

transmitted or transcribed on data files or on any other type of media, including but not limited to electronic and digital media, whether or not labeled as “confidential”;

(2)     Whether directly or indirectly, and whether for the Participant’s account or for any person or entity other than the Company or any of its affiliates:

(a)     hiring, employing, soliciting for employment or hiring, or attempting to solicit for employment or hire, any person who is employed by the Company or any of its affiliates or inducing any such employee to terminate his or her employment or accept employment with anyone other than the Company or any of its affiliates, or otherwise interfering with the relationship between the Company or any of its affiliates and any of its employees; or

(b)     soliciting or assisting in soliciting for business any customer of the Company or any of its affiliates, or inducing or encouraging any such customer to discontinue or diminish his, her or its relationship or prospective relationship with the Company or any of its affiliates, or diverting business away from the Company or any of its affiliates;

(3)     Making any false or disparaging comments about the Company or any of its subsidiaries, affiliates, employees, officers, or directors; or

(4)     Engaging in any activity which in the opinion of the Company is not consistent with providing an orderly handover of the Participant’s responsibilities.

The Participant agrees that the foregoing restrictions are reasonable and necessary to protect the Company’s business and that the grant of this Award, along with the benefits and attributes of the Participant’s employment by the Company, is good and valuable consideration to compensate the Participant for agreeing to these restrictions.

iii. “Disability” means the Participant is entitled to, and has begun to receive, long-term disability benefits under the long-term disability plan of the Company in which the Participant participates.

iv.“Good Reason” means any of the following changes, as compared to the Participant's terms of employment prior to a Change of Control:

(1)     a material diminution in the Participant’s authority, duties, or responsibilities;

(2)     a material diminution in the Participant’s base salary other than a general reduction in base salary that affects all similarly situated employees; or

(3)     a relocation of the Participant’s principal place of employment by more than 50 miles from his or her current principal place of employment, unless the new principal place of employment is closer to the Participant's home address.

Provided, however, that the Participant must give written notice to the Company within 30 days of the initial existence of any of the foregoing changes, the Company shall have 30 days upon receipt of such notice to remedy the condition so as to eliminate the Good Reason, and if not remedied, the Participant’s employment must terminate no later than 60 days following the expiration of such cure period. Notwithstanding the foregoing, the Participant’s continued employment shall not constitute a waiver of the Participant’s rights with respect to any circumstance constituting Good Reason under this Award Agreement.

v. “Performance Period” means the three-year period beginning on January 1, 2016 and ending on December 31, 2018.

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EXHIBIT 10.1

vi.“Performance Period Start Date” means the date that the Performance Period begins, as set forth in Section 12(a)(v).

vii.“Retirement” means the Participant’s age plus years of service (in each case, including completed months) equals or exceeds 65, with a minimum of at least five years of service with the Company.

(b)    Notices. All notices, requests and other communications under this Award Agreement shall be in writing and shall be delivered in person (by courier or otherwise), mailed by certified or registered mail, return receipt requested, or sent by facsimile transmission or by e-mail or any other form of electronic transmission or delivery approved by the Committee, as follows:

if to the Company, to:

Citizens Financial Group, Inc.
600 Washington Blvd.
Stamford, CT 06901
Attention: Corporate Secretary

if to the Participant, to the address that the Participant most recently provided to the Company,

or to such other address, facsimile number, e-mail address or such other form of electronic transmission or delivery as such party may hereafter specify for the purpose by notice to the other parties hereto. All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. on a business day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed received on the next succeeding business day in the place of receipt. Notwithstanding anything to the contrary contained in this Award Agreement or in the Plan, the Company may, in its sole discretion, deliver and, by acceptance of this grant, the Participant hereby explicitly and unambiguously consents and agrees to the receipt and delivery of, any notices permitted or required hereunder, documents related to any Awards granted under the Plan and/or any other information (including, without limitation, information required to be delivered to the Participant pursuant to applicable securities laws) regarding the Company and the Subsidiaries or the Plan by electronic means, including but not limited to through the Participant’s electronic account, through another on-line or electronic account system established and maintained by the Company or another third party designated by the Company or via the Company website. Such consent shall remain in effect throughout the Participant’s term of employment or service with the Company and thereafter until withdrawn in writing by the Participant. The Participant acknowledges that the Participant may receive from the Company a paper copy of any notices or documents delivered electronically at no cost to the Participant by contacting the Company by telephone or in writing.

(c)    Entire Agreement. This Award Agreement and the Plan (including the terms specified in the Participant's electronic account, as noted in Section 1, Section 2 and Section 6 above) constitute the entire agreement and understanding between the parties in respect of the subject matter hereof and supersede all prior and contemporaneous arrangements, agreements and understandings, both oral and written, whether in term sheets, presentations or otherwise, between the parties with respect to the subject matter hereof.

(d)    Severability. If any provision of this Award Agreement is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction, or would disqualify the Plan or this Award Agreement under any law deemed applicable by the Board, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Board, materially altering the intent of this Award

6

EXHIBIT 10.1

Agreement, such provision shall be stricken as to such jurisdiction, and the remainder of this Award Agreement shall remain in full force and effect.

(e)    Amendment; Waiver. No amendment or modification of any provision of this Award Agreement that has a material adverse effect on the Participant shall be effective unless signed in writing by or on behalf of the Company and the Participant, provided that the Company may amend or modify this Award Agreement without the Participant’s consent in accordance with the provisions of the Plan or as otherwise set forth in this Award Agreement. No waiver of any breach or condition of this Award Agreement shall be deemed to be a waiver of any other or subsequent breach or condition, whether of like or different nature. Any amendment or modification of or to any provision of this Award Agreement, or any waiver of any provision of this Award Agreement, shall be effective only in the specific instance and for the specific purpose for which made or given.

(f)    Assignment. Neither this Award Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by the Participant.

(g)    Successors and Assigns; No Third-Party Beneficiaries. This Award Agreement shall inure to the benefit of and be binding upon the Company and the Participant and their respective heirs, successors, legal representatives and permitted assigns. Nothing in this Award Agreement, express or implied, is intended to confer on any Person other than the Company and the Participant, and their respective heirs, successors, legal representatives and permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Award Agreement.

(h)    Governing Law; Waiver of Jury Trial. This Award Agreement shall be governed by the laws of the State of Delaware, without application of the conflicts of law principles thereof. By acknowledging this Award Agreement electronically or signing it manually, as applicable, the Participant waives any right that the Participant may have to trial by jury in respect of any litigation based on, arising out of, under or in connection with this Award Agreement or the Plan.

(i)    Discretionary Nature. The grant of the PSUs does not create any contractual right or other right in the Participant to receive any PSUs or other Awards in the future. Future grants of Awards, if any, shall be at the sole discretion of the Company.

(j)    Participant Undertaking; Acceptance. The Participant agrees to take whatever additional action and execute whatever additional documents the Company may deem necessary or advisable to carry out or give effect to any of the obligations or restrictions imposed on either the Participant or the PSUs pursuant to this Award Agreement. The Participant acknowledges receipt of a copy of the Plan and this Award Agreement and understands that material definitions and provisions concerning the PSUs and the Participant’s rights and obligations with respect thereto are set forth in the Plan. The Participant has read carefully, and understands, the provisions of this Award Agreement and the Plan.

(k)    Dispute Resolution. Except as provided in the last sentence of this paragraph to the fullest extent permitted by law, the Company and the Participant agree to waive their rights to seek remedies in court, including but not limited to rights to a trial by jury. The Company and each Participant agree that any dispute between or among them and/or their affiliates arising out of, relating to or in connection with this Plan shall be resolved in accordance with a confidential two-step dispute resolution procedure involving: (a) Step One: non-binding mediation, and (b) Step Two: binding arbitration under the Federal Arbitration Act, 9 U.S.C. § 1, et. seq., or state law, whichever is applicable. Any such mediation or arbitration hereunder shall be under the auspices of the American Arbitration Association (“AAA”) pursuant to its then current AAA Commercial Arbitration Rules. No arbitration shall be initiated or take place with respect to a given dispute if the parties have successfully achieved a mutually agreed to resolution of the dispute as a result

7

EXHIBIT 10.1

of the Step One mediation. The mediation session(s) and, if necessary, the arbitration hearing shall be held in the city/location selected by the Company in its sole discretion. The arbitration (if the dispute is not resolved by mediation) shall be conducted by a single AAA arbitrator, selected by the Company in its sole discretion. Any award rendered by the arbitrator, including with respect to responsibility for AAA charges (including the costs of the mediator and arbitrator), shall be final and binding, and judgment may be entered on it in any court of competent jurisdiction. In the unlikely event the AAA refuses to accept jurisdiction over a dispute, the Company and each Participant agree to submit to JAMS (formerly known as Judicial Arbitration and Mediation Services) mediation and arbitration applying the JAMS equivalent of the AAA Commercial Arbitration Rules. If AAA and JAMS refuse to accept jurisdiction, the parties may litigate in a court of competent jurisdiction.

(l)    Captions. Captions provided herein are for convenience only and shall not affect the scope, meaning, intent or interpretation of the provisions of this Award Agreement.

(m)    Nature of Payments. Any and all grants or deliveries related to the PSUs hereunder shall constitute special incentive payments to the Participant and shall not be taken into account in computing the amount of salary or compensation of the Participant for the purpose of determining any retirement, death or other benefits under (i) any retirement, bonus, life insurance or other employee benefit plan of the Company, or (ii) any agreement between the Company and the Participant, except as such plan or agreement shall otherwise expressly provide.

(n)    Data Privacy. The Participant understands that the Company and its affiliates hold certain personal information about the Participant, including but not limited to the Participant’s name, home address and telephone number, birthdate, social insurance number or other identification number, compensation, details of all Awards or any other entitlement to Shares for the purpose of administering the Plan (the “Data”). As a condition of receipt of this Award, the Participant explicitly consents to the collection, use, transfer and retention, in electronic or other form, of the Data by and among, as applicable, the Company, its affiliates and any third parties assisting the Company in administration of the Plan (including but not limited to any broker or other third party with whom the Participate may elect to deposit Shares), in each case, for the purpose of administering the Participant’s participation in the Plan.

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EXHIBIT I

I-1

EX-10.2

EXHIBIT 10.2

CITIZENS FINANCIAL GROUP, INC.
2014 OMNIBUS INCENTIVE PLAN

Bruce Van Saun – May 2016 Grant

Restricted Stock Unit Award Agreement
Terms and Conditions

Unless defined in this award agreement (this “Award Agreement”), capitalized terms shall have the meanings assigned to them in the Citizens Financial Group, Inc. 2014 Omnibus Incentive Plan (the “Plan”). In the event of a conflict among the provisions of the Plan and this Award Agreement, the provisions of the Plan shall prevail.

Section 1.Grant of RSU Award. Citizens Financial Group, Inc. (together with its Subsidiaries, the “Company”) has granted to the Participant (the “Participant”) an award (the “Award”) of the number of restricted share units (“RSUs”) specified in the Participant’s electronic account, effective on the “Grant Date” specified in the Participant's electronic account. The Award is subject to the terms and conditions of the Plan and this Award Agreement. The Award is granted under the Plan, the provisions of which are incorporated herein by reference and made a part of this Award Agreement.

Section 2.    Issuance of RSUs. Each RSU shall represent the right to receive one Share upon the vesting of such RSU, as determined in accordance with and subject to the terms of this Award Agreement and the Plan.

Section 3.    Rights as a Shareholder; Dividend Equivalents.

(a)    The Participant shall have no voting rights or any other rights as a shareholder of the Company with respect to the RSUs unless and until the Participant becomes the record owner of the Shares underlying such RSUs.

(b)    If a dividend is declared on Shares during the period commencing on the Grant Date (including such date) and ending on the date on which the Shares underlying RSUs are distributed to the Participant pursuant to Section 6, the Participant shall be credited with dividend equivalents in the form and in an amount equal to the dividend that the Participant would have received had the Shares underlying the RSUs been distributed to the Participant as of the time at which such dividend is paid. Dividend equivalents will be subject to the same vesting and forfeiture restrictions as the RSUs to which they are attributable and will be paid on the same date that the RSUs to which they are attributable are settled in accordance with Section 6.

Section 4.    Restrictions on Transferability. The RSUs granted hereunder shall not be assigned, sold, exchanged, pledged, hypothecated, transferred, alienated or otherwise disposed of or hedged, in any manner (including through the use of any cash-settled instrument), whether voluntarily or involuntarily, and whether by operation of law or otherwise, other than by will or by the laws of descent and distribution, by the Participant. Any sale, exchange, transfer, assignment, pledge, hypothecation, or other disposition in violation of the provisions of this Section 4 shall be null and void and any RSU which is hedged in any manner shall immediately be forfeited. All of the terms and conditions of the Plan and this Award Agreement shall be binding upon any permitted successors and assigns.

Section 5.    Vesting; Change of Control; Vesting and Forfeiture Upon a Termination of Employment.

(a)    Vesting. The Award will be subject to the vesting schedule specified in the Participant’s electronic account.

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EXHIBIT 10.2

(b)    Change of Control. If the Participant is terminated by the Company without Cause, or the Participant resigns from employment with the Company with Good Reason, within 24 months after a Change of Control (a “Change of Control Termination”), all unvested RSUs shall fully vest on the Participant’s termination date and shall be distributed to the Participant pursuant to Section 6.

(c)    Vesting and Forfeiture Upon Termination of Employment.

i.Termination by the Company Without Cause or Termination by Participant with Good Reason. If the Participant is terminated by the Company without Cause or the Participant terminates with Good Reason (other than a Change of Control Termination), the Participant’s RSUs shall continue to vest in accordance with Section 5(a) as though the Participant was still employed by the Company on each applicable vesting date, provided, however, that the Participant does not engage in any Detrimental Activity for twelve (12) months less any time spent on garden leave and/or any notice period.

ii.Disability. If the Participant’s employment is terminated due to Disability, the Participant’s RSUs shall continue to vest in accordance with Section 5(a) as though the Participant was still employed by the Company on each applicable vesting date, provided, however, that (A) the Participant does not engage in any Detrimental Activity for twelve (12) months less any time spent on garden leave and/or any notice period and (B) neither the Participant nor any person or enterprise controlled by him holds any position as employee, director, officer, consultant, partner, agent or principal in or with any company in the Competitive Group.

iii.Death. If the Participant is terminated due to death, the Participant’s RSUs shall fully vest on the Participant’s date of death and shall be distributed to the Participant’s Beneficiary pursuant to Section 6.

iv.Forfeiture. If the Participant is terminated by the Company with Cause or the Participant resigns without Good Reason, any unvested RSUs shall be forfeited in their entirety on the Participant’s termination date without any payment to the Participant. In addition, if (A) the Participant’s employment is terminated by the Company without Cause or the Participant resigns with Good Reason (other than a Change of Control Termination) and the Participant engages in any Detrimental Activity during a twelve (12) month period less any time spent on garden leave and/or any notice period, or (B) the Participant’s employment is terminated due to Disability and the Participant either (I) engages in any Detrimental Activity during a twelve (12) month period less any time spent on garden leave and/or any notice period, or (II) either the Participant or any person or enterprise controlled by him holds any position as employee, director, officer, consultant, partner, agent or principal in or with any company in the Competitive Group during the Participant’s post-employment vesting period, any unvested RSUs shall be forfeited in their entirety on the date that the Participant engages in such Detrimental Activity or becomes employed by any company in the Competitive Group, as applicable, without any payment to the Participant.

If the Participant wishes to take up a position with any companies that are in the Competitive Group, he should notify the Board of that wish and the Board will consider in good faith whether to release him from the restrictions in this Section to the extent permitted to allow him to take up such position (and the Board will not unreasonably decline to provide such release). In the event the Board grants a release from the restrictions in this Section, the forfeiture scenarios related to Non-Competition shall be negated. Notwithstanding the foregoing, nothing in this Section shall prohibit the Participant’s ownership of less than two percent (2%) of the outstanding shares of the stock or other equity of any company engaged in any business, which shares or other equity are regularly traded on a national securities exchange or in any over-the-

2

EXHIBIT 10.2

counter market or the provision of services to a subsidiary, division or affiliate of a competitive business if such subsidiary, division or affiliate is not itself engaged in a competitive business and the Participant does not provide services to, or have any responsibilities regarding, the competitive business.

Section 6.    Distribution on Vesting. Subject to the provisions of this Award Agreement, upon the vesting of any of the RSUs, the Company shall deliver to the Participant (or the Participant’s Beneficiary, in the event of the Participant’s death prior to distribution), as soon as reasonably practicable after the vesting date (or the Participant’s termination date, as applicable), one Share for each RSU, provided that such delivery of Shares shall be made no later than the end of the calendar year in which they vest or, if later, by the 15^th day of the third calendar month after the vesting date provided that the Participant shall not be permitted, directly or indirectly, to designate the taxable year of the payment. Upon such delivery, such Shares shall be fully assignable, saleable and transferable by the Participant, provided that any such assignment, sale, transfer or other alienation with respect to such Shares shall be in accordance with applicable securities laws.

Section 7.    Tax Liability; Withholding Requirements. The Participant shall be solely responsible for any applicable taxes (including, without limitation, income and excise taxes) and penalties, and any interest that accrues thereon, that the Participant incurs in connection with the receipt, vesting or settlement of any RSU granted hereunder. The Company shall be authorized to withhold from the Award the amount (in cash or Shares, or any combination thereof) of applicable withholding taxes due in respect of the Award, its settlement or any payment or transfer under the Award and to take such other action (including providing for elective payment of such amounts in cash or other property by the Participant) as may be necessary in the opinion of the Company to satisfy all obligations for the payment of such taxes; provided, however, that no Shares shall be withheld with a value exceeding the minimum amount of tax required to be withheld by law.

Section 8.    Recoupment/Clawback. The Participant hereby acknowledges and agrees that in order to comply with applicable law (including, without limitation, the Dodd-Frank Wall Street Reform and Consumer Protection Act), the Committee retains the right at all times to decrease or terminate all awards and payments under the Plan, and any and all amounts payable under the Plan, or paid under the Plan, shall be subject to clawback, forfeiture, and reduction to the extent determined necessary to comply with applicable law.

Section 9.    No Right to Continued Employment. Neither the Plan nor this Award Agreement shall confer upon the Participant any right to continue to be employed by the Company and the receipt of the Award does not confer any rights on the Participant other than those expressly set forth in this Award Agreement or the Plan.

Section 10.    Section 409A of the Code. This Award Agreement is intended to comply with the requirements of Section 409A of the Code and the regulations thereunder, and the provisions of this Award Agreement shall be interpreted in a manner that satisfies the requirements of Section 409A of the Code, and this Award Agreement shall be operated accordingly. If any provision of this Award Agreement or any term or condition of the RSUs would otherwise conflict with this intent, the provision, term or condition shall be interpreted and deemed amended so as to avoid this conflict. Notwithstanding anything else in this Award Agreement, if the Board considers a Participant to be a “specified employee” under Section 409A of the Code at the time of such Participant’s “separation from service” (as defined in Section 409A of the Code), and the amount hereunder is “deferred compensation” subject to Section 409A of the Code any distribution that otherwise would be made to such Participant with respect to RSUs as a result of such separation from service shall not be made until the date that is six months after such separation from service, except to the extent that earlier distribution would not result in such

3

EXHIBIT 10.2

Participant’s incurring interest or additional tax under Section 409A of the Code. If the Award includes a “series of installment payments” (within the meaning of Section 1.409A-2(b)(2)(iii) of the Treasury Regulations), the Participants’ right to the series of installment payments shall be treated as a right to a series of separate payments and not as a right to a single payment. Notwithstanding the foregoing, the tax treatment of the benefits provided under this Award Agreement is not warranted or guaranteed, and in no event shall the Company be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by the Participant on account of non-compliance with Section 409A of the Code.

Section 11.    Miscellaneous.

(a)    Definitions. For purposes of this Award Agreement:

i.“Cause” means:

(1)     the Participant’s indictment for, conviction of, plea of guilty or of nolo contendere to by the Participant for the commission of any: (a) felony, (b) criminal offense within the scope of Section 19 of the Federal Deposit Insurance Act, 12 U.S.C. § 1829, or (c) misdemeanor involving dishonesty;

(2)     the Participant commits a material breach of his obligations under the Amended and Restated Executive Employment Agreement between the Company and the Participant, dated as of May 5, 2016 (the “Employment Agreement”), or repeats or continues after written warning any material breach of his obligations thereunder, or is, in the opinion of the Board, guilty of gross misconduct which brings him or the Company or any of its affiliates into disrepute;

(3)     the Participant is guilty of dishonesty in the conduct of his duties, gross incompetence, willful neglect of duty, or of mismanagement of his financial affairs through failure to observe the Company’s rules and procedures for the operation of bank accounts and/or borrowings;

(4)     the Participant commits any act of bankruptcy or takes advantage of any statute for the time being in force offering relief to insolvent debtors; or

(5)     as a result of any default on the part of the Participant, he is prohibited by law from acting as an officer of the Company or any of its affiliates.

ii.“Competitive Group” includes JP Morgan Chase, Bank of America, Citigroup, Wells Fargo, US Bancorp, Regions Financial Corp., M&T Bank Corp., PNC, Fifth Third, Sun Trust, Comerica, KeyCorp, BB&T, Capital One, and TD Bank.

iii. “Covered Employee” means any person who was employed by the Company at any time within twelve (12) months prior to the time of the act of solicitation and was also employed by the Company or any of its subsidiaries or affiliates on the date of the Participant’s termination of employment.

iv.“Detrimental Activity” includes the following:

(1)     whether for the Participant’s own account or for any other person or entity: (a) hiring, employing, soliciting for employment or hiring, or attempting to solicit for employment or hire any Covered Employee; or (ii) otherwise interfering with the relationship between any Covered Employee and the Company. Notwithstanding anything herein to the contrary, the Company agrees that the Participant shall not be deemed in violation of this Section

4

EXHIBIT 10.2

if an entity with which the Participant is associated hires or engages any employee of the Company or any of its subsidiaries, if the Participant was not, directly or indirectly, involved in hiring or identifying such person as a potential recruit or assisting in the recruitment of such employee; or

(2) whether for the Participant’s own account or for any other person or entity, through any corporation, partnership or other business entity of any kind, soliciting, assisting in soliciting for business or enticing away or in any manner attempting to persuade any client or customer or prospective client or customer to discontinue or diminish his, her or its relationship or prospective relationship with the Company, or otherwise provide business to any person, corporation, partnership or other business entity of any kind other than the Company; provided, however, that general solicitation through advertisement shall not constitute solicitation for purposes of this provision. The restrictions in this Section shall apply only to: (1) clients, customers or prospective clients or customers introduced to the Participant by the Company; or (2) any customer of the Company (whether previously known to the Participant or introduced to the Participant through the Company) with whom the Participant had contact during the Participant’s employment by the Company (including any notice period); or (3) any customer or client of the Company whose identity as a client or potential client became known to the Participant as a result of the Participant’s employment with the Company.

The Participant agrees that the foregoing restrictions are reasonable and necessary to protect the Company’s business and that the grant of this Award, along with the benefits and attributes of the Participant’s employment by the Company, is good and valuable consideration to compensate the Participant for agreeing to these restrictions.

v. “Disability” means the Participant’s physical or mental incapacitation such that the Participant is unable for a period of six (6) months or for an aggregate of six (6) months in any twenty-four (24) consecutive month period to perform the Participant’s duties.

vi.“Good Reason” means any of the following:

(1)    a material breach by the Company of the Employment Agreement;

(2)    substantial diminution or other substantial adverse change, not consented to by the Participant, in the nature or scope of the Participant’s responsibilities, authorities, powers, functions or duties or in the Participant’s base salary, save that removal of the role of Chairman of the Company from the Participant’s remit shall not amount to Good Reason (although for the avoidance of doubt the Company has not determined this matter and any such decision will be taken with consideration of any such factors as the Board believes relevant).

Provided, however, that the Participant must give written notice to the Company within 60 days of the initial existence of any of the foregoing changes, the Company shall have 30 days upon receipt of such notice to remedy the condition so as to eliminate the Good Reason, and if not remedied, the Participant’s employment must terminate no later than 60 days following the expiration of such cure period. Notwithstanding the foregoing, the Participant’s continued employment shall not constitute a waiver of the Participant’s rights with respect to any circumstance constituting Good Reason under this Award Agreement.

(b)    Notices. All notices, requests and other communications under this Award Agreement shall be in writing and shall be delivered in person (by courier or otherwise), mailed by

5

EXHIBIT 10.2

certified or registered mail, return receipt requested, or sent by facsimile transmission or by e-mail or any other form of electronic transmission or delivery approved by the Committee, as follows:

if to the Company, to:

Citizens Financial Group, Inc.
600 Washington Blvd.
Stamford, CT 06901
Attention: Corporate Secretary

if to the Participant, to the address that the Participant most recently provided to the Company,

or to such other address, facsimile number, e-mail address or such other form of electronic transmission or delivery as such party may hereafter specify for the purpose by notice to the other parties hereto. All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. on a business day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed received on the next succeeding business day in the place of receipt. Notwithstanding anything to the contrary contained in this Award Agreement or in the Plan, the Company may, in its sole discretion, deliver and, by acceptance of this grant, the Participant hereby explicitly and unambiguously consents and agrees to the receipt and delivery of, any notices permitted or required hereunder, documents related to any Awards granted under the Plan and/or any other information (including, without limitation, information required to be delivered to the Participant pursuant to applicable securities laws) regarding the Company and the Subsidiaries or the Plan by electronic means, including but not limited to through the Participant’s electronic account, through another on-line or electronic account system established and maintained by the Company or another third party designated by the Company or via the Company website. Such consent shall remain in effect throughout the Participant’s term of employment or service with the Company and thereafter until withdrawn in writing by the Participant. The Participant acknowledges that the Participant may receive from the Company a paper copy of any notices or documents delivered electronically at no cost to the Participant by contacting the Company by telephone or in writing.

(c)    Entire Agreement. This Award Agreement and the Plan (including the terms specified in the Participant's electronic account, as noted in Section 1 and Section 5 above) constitute the entire agreement and understanding between the parties in respect of the subject matter hereof and supersede all prior and contemporaneous arrangements, agreements and understandings, both oral and written, whether in term sheets, presentations or otherwise, between the parties with respect to the subject matter hereof.

(d)    Severability. If any provision of this Award Agreement is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction, or would disqualify the Plan or this Award Agreement under any law deemed applicable by the Board, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Board, materially altering the intent of this Award Agreement, such provision shall be stricken as to such jurisdiction, and the remainder of this Award Agreement shall remain in full force and effect.

(e)    Amendment; Waiver. No amendment or modification of any provision of this Award Agreement that has a material adverse effect on the Participant shall be effective unless signed in writing by or on behalf of the Company and the Participant, provided that the Company may amend or modify this Award Agreement without the Participant’s consent in accordance with the provisions of the Plan or as otherwise set forth in this Award Agreement. No waiver of any

6

EXHIBIT 10.2

breach or condition of this Award Agreement shall be deemed to be a waiver of any other or subsequent breach or condition, whether of like or different nature. Any amendment or modification of or to any provision of this Award Agreement, or any waiver of any provision of this Award Agreement, shall be effective only in the specific instance and for the specific purpose for which made or given.

(f)    Assignment. Neither this Award Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by the Participant.

(g)    Successors and Assigns; No Third-Party Beneficiaries. This Award Agreement shall inure to the benefit of and be binding upon the Company and the Participant and their respective heirs, successors, legal representatives and permitted assigns. Nothing in this Award Agreement, express or implied, is intended to confer on any Person other than the Company and the Participant, and their respective heirs, successors, legal representatives and permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Award Agreement.

(h)    Governing Law; Waiver of Jury Trial. This Award Agreement shall be governed by the laws of the State of Delaware, without application of the conflicts of law principles thereof. By acknowledging this Award Agreement electronically or signing it manually, as applicable, the Participant waives any right that the Participant may have to trial by jury in respect of any litigation based on, arising out of, under or in connection with this Award Agreement or the Plan.

(i)    Discretionary Nature. The grant of the RSUs does not create any contractual right or other right in the Participant to receive any RSUs or other Awards in the future. Future grants of Awards, if any, shall be at the sole discretion of the Company.

(j)    Participant Undertaking; Acceptance. The Participant agrees to take whatever additional action and execute whatever additional documents the Company may deem necessary or advisable to carry out or give effect to any of the obligations or restrictions imposed on either the Participant or the RSUs pursuant to this Award Agreement. The Participant acknowledges receipt of a copy of the Plan and this Award Agreement and understands that material definitions and provisions concerning the RSUs and the Participant’s rights and obligations with respect thereto are set forth in the Plan. The Participant has read carefully, and understands, the provisions of this Award Agreement and the Plan.

(k)    Dispute Resolution. Except as provided in the last sentence of this paragraph to the fullest extent permitted by law, the Company and the Participant agree to waive their rights to seek remedies in court, including but not limited to rights to a trial by jury. The Company and each Participant agree that any dispute between or among them and/or their affiliates arising out of, relating to or in connection with this Plan shall be resolved in accordance with a confidential two-step dispute resolution procedure involving: (a) Step One: non-binding mediation, and (b) Step Two: binding arbitration under the Federal Arbitration Act, 9 U.S.C. § 1, et. seq., or state law, whichever is applicable. Any such mediation or arbitration hereunder shall be under the auspices of the American Arbitration Association (“AAA”) pursuant to its then current AAA Commercial Arbitration Rules. No arbitration shall be initiated or take place with respect to a given dispute if the parties have successfully achieved a mutually agreed to resolution of the dispute as a result of the Step One mediation. The mediation session(s) and, if necessary, the arbitration hearing shall be held in the city/location selected by the Company in its sole discretion. The arbitration (if the dispute is not resolved by mediation) shall be conducted by a single AAA arbitrator, selected by the Company in its sole discretion. Any award rendered by the arbitrator, including with respect to responsibility for AAA charges (including the costs of the mediator and arbitrator), shall be final and binding, and judgment may be entered on it in any court of competent jurisdiction. In the unlikely event the AAA refuses to accept jurisdiction over a dispute, the Company and each

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EXHIBIT 10.2

Participant agree to submit to JAMS mediation (formerly known as Judicial Arbitration and Mediation Services) and arbitration applying the JAMS equivalent of the AAA Commercial Arbitration Rules. If AAA and JAMS refuse to accept jurisdiction, the parties may litigate in a court of competent jurisdiction.

(l)    Captions. Captions provided herein are for convenience only and shall not affect the scope, meaning, intent or interpretation of the provisions of this Award Agreement.

(m)    Nature of Payments. Any and all grants or deliveries related to the RSUs hereunder shall constitute special incentive payments to the Participant and shall not be taken into account in computing the amount of salary or compensation of the Participant for the purpose of determining any retirement, death or other benefits under (i) any retirement, bonus, life insurance or other employee benefit plan of the Company, or (ii) any agreement between the Company and the Participant, except as such plan or agreement shall otherwise expressly provide.

(n)    Data Privacy. The Participant understands that the Company and its affiliates and hold certain personal information about the Participant, including but not limited to the Participant’s name, home address and telephone number, birthdate, social insurance number or other identification number, compensation, details of all Awards or any other entitlement to Shares for the purpose of administering the Plan (the “Data”). As a condition of receipt of this Award, the Participant explicitly consents to the collection, use, transfer and retention, in electronic or other form, of the Data by and among, as applicable, the Company, its affiliates and any third parties assisting the Company in administration of the Plan (including but not limited to any broker or other third party with whom the Participate may elect to deposit Shares), in each case, for the purpose of administering the Participant’s participation in the Plan.

8

EX-10.3

EXHIBIT 10.3

CITIZENS FINANCIAL GROUP, INC.
2014 OMNIBUS INCENTIVE PLAN

Bruce Van Saun – May 2016 Grant

Performance Share Unit Award Agreement Terms and Conditions

Unless defined in this award agreement (this “Award Agreement”), capitalized terms shall have the meanings assigned to them in the Citizens Financial Group, Inc. 2014 Omnibus Incentive Plan (the “Plan”). In the event of a conflict among the provisions of the Plan and this Award Agreement, the provisions of the Plan shall prevail.

Section 1.     Grant of PSU Award. Citizens Financial Group, Inc. (together with its Subsidiaries, the “Company”) has granted to the Participant (the “Participant”) an award (the “Award”) of the target number of performance share units specified in the Participant’s electronic account, effective on the “Grant Date” specified in the Participant’s electronic account. The Award is subject to the terms and conditions of the Plan and this Award Agreement. The Award is granted under the Plan, the provisions of which are incorporated herein by reference and made a part of this Award Agreement.

Section 2.     Issuance of PSUs. Each performance share unit (“PSU”) shall represent the right to receive one Share upon the vesting of such PSU, as determined in accordance with and subject to the terms of this Award Agreement and the Plan. The number of PSUs that the Participant will actually earn will be determined in accordance with Section 6(b) or Exhibit I of this Award Agreement, as applicable.

Section 3.     Rights as a Shareholder; Dividend Equivalents.

(a)The Participant shall have no voting rights or any other rights as a shareholder of the Company with respect to the PSUs unless and until the Participant becomes the record owner of the Shares underlying such PSUs.

(b)    If a dividend is declared on Shares during the period commencing on the Grant Date (including such date) and ending on the date on which the Shares underlying PSUs are distributed to the Participant pursuant to Section 7, the Participant shall be credited with dividend equivalents in the form and in an amount equal to the dividend that the Participant would have received had the Shares underlying the PSUs been distributed to the Participant as of the time at which such dividend is paid. Dividend equivalents will be subject to the same vesting and forfeiture restrictions as the PSUs to which they are attributable and will be paid on the same date that the PSUs to which they are attributable are settled in accordance with Section 7.

Section 4.     Restrictions on Transferability. The PSUs granted hereunder shall not be assigned, sold, exchanged, pledged, hypothecated, transferred, alienated or otherwise disposed of or hedged, in any manner (including through the use of any cash-settled instrument), whether voluntarily or involuntarily, and whether by operation of law or otherwise, other than by will or by the laws of descent and distribution, by the Participant. Any sale, exchange, transfer, assignment, pledge, hypothecation, or other disposition in violation of the provisions of this Section 4 shall be null and void and any PSU which is hedged in any manner shall immediately be forfeited. All of the terms and conditions of the Plan and this Award Agreement shall be binding upon any permitted successors and assigns.

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EXHIBIT 10.3

Section 5.     Performance Assessment.

(a)    Except in the event of a Change of Control, the number of PSUs earned by the Participant for the Performance Period will be determined in accordance with Exhibit I. The Committee shall determine, in its sole discretion, the number of PSUs earned by the Participant.

(b)    Promptly following the end of the Performance Period (and no later than 60 days following the end of the Performance Period), the Committee will review and certify in writing (i) whether, and to what extent, performance has been achieved in accordance with Exhibit I, and (ii) the number of PSUs that the Participant shall earn, if any, subject to compliance with the requirements of Section 6. The Committee’s certification shall be final, conclusive and binding on the Participant, and on all other persons, to the maximum extent permitted by law.

Section 6. Vesting; Change of Control; Vesting and Forfeiture Upon a Termination of Employment.

(a)    Vesting. The number of PSUs earned by the Participant, if any, determined as set forth in Section 5(b), will vest and become nonforfeitable following the end of the Performance Period on the vesting date identified in the Participant’s electronic account (the “Vesting Date”), subject to the Participant’s continued service from the Grant Date through the Vesting Date.

(b)    Change of Control. In the event of a Change of Control prior to the end of the Performance Period:

i.Upon a Change of Control, the Participant will be deemed to have earned the target number of PSUs set forth on Exhibit I, subject to compliance with the requirements of this Section 6(b)(ii).

ii.Following the Change of Control, the PSUs deemed earned pursuant to Section 6(b)(i) will remain subject to forfeiture and conditioned on the Participant’s continued service from the Grant Date through the Vesting Date; provided, however, that if the Participant is terminated by the Company without Cause, or the Participant resigns from employment with the Company with Good Reason, within 24 months after the Change of Control (a “Change of Control Termination”), the PSUs earned by the Participant, as determined by the Committee pursuant to Section 6(b)(i), shall fully vest on the Participant’s termination date and shall be distributed to the Participant in accordance with Section 7.

(c)    Vesting and Forfeiture Upon Termination of Employment.

i.Termination by the Company Without Cause or Termination by Participant with Good Reason. If the Participant is terminated by the Company without Cause or the Participant terminates with Good Reason (other than a Change of Control Termination), the Participant will be deemed to have earned the target number of PSUs set forth on Exhibit I, which shall vest on the Vesting Date in accordance with Section 6(a) as though the Participant was still employed by the Company through the Vesting Date; provided, however, that the Participant does not engage in any Detrimental Activity for twelve (12) months less any time spent on garden leave and/or any notice period.

ii.Disability. If the Participant’s employment is terminated by reason of Disability, the Participant will be deemed to have earned the target number of PSUs set forth on Exhibit I, which shall vest on the Vesting Date in accordance with Section 6(a) as though the Participant was still employed by the Company through the Vesting Date; provided, however, that (A) the Participant does not engage in any Detrimental Activity for twelve (12) months less any time spent on garden leave and/or any notice period and (B) neither the Participant nor any

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person or enterprise controlled by him holds any position as employee, director, officer, consultant, partner, agent or principal in or with any company in the Competitive Group, in each case, during the Participant’s post-employment vesting period.

iii.Death. If the Participant is terminated due to death, the target number of PSUs shall fully vest on the Participant’s date of death and shall be distributed to the Participant’s Beneficiary in accordance with Section 7.

iv.Forfeiture. If the Participant is terminated by the Company with Cause or the Participant resigns without Good Reason, any unvested PSUs shall be forfeited in their entirety on the Participant’s termination date without any payment to the Participant. In addition, if (A) the Participant’s employment is terminated by the Company without Cause or the Participant resigns with Good Reason (other than a Change of Control Termination) and the Participant engages in any Detrimental Activity during a twelve (12) month period less any time spent on garden leave and/or any notice period., or (B) the Participant’s employment is terminated due to Disability and the Participant either (I) engages in any Detrimental Activity during a twelve (12) month period less any time spent on garden leave and/or any notice period, or (II) either the Participant or any person or enterprise controlled by him holds any position as employee, director, officer, consultant, partner, agent or principal in or with any company in the Competitive Groupduring the Participant’s post-employment vesting period, any unvested PSUs shall be forfeited in their entirety on the date that the Participant engages in such Detrimental Activity or becomes employed by any company within the Competitive Group, as applicable, without any payment to the Participant.

    If the Participant wishes to take up a position with any companies that are in the Competitive Group, he should notify the Board of that wish and the Board will consider in good faith whether to release him from the restrictions in this Section to the extent permitted to allow him to take up such position (and the Board will not unreasonably decline to provide such release).  In the event the Board grants a release from the restrictions in this Section, the forfeiture scenarios related to Non-Competition shall be negated.  Notwithstanding the foregoing, nothing in this Section shall prohibit the Participant’s ownership of less than two percent (2%) of the outstanding shares of the stock or other equity of any company engaged in any business, which shares or other equity are regularly traded on a national securities exchange or in any over-the-counter market or the provision of services to a subsidiary, division or affiliate of a competitive business if such subsidiary, division or affiliate is not itself engaged in a competitive business and the Participant does not provide services to, or have any responsibilities regarding, the competitive business.

Section 7.     Distribution on Vesting. Subject to the provisions of this Award Agreement, upon the vesting of any of the PSUs, the Company shall deliver to the Participant (or the Participant’s Beneficiary, in the event of the Participant’s death prior to distribution), as soon as reasonably practicable after the applicable Vesting Date (or the Participant’s termination date, as applicable), one Share for each PSU, provided that such delivery of Shares shall be made no later than March 15 of the calendar year immediately following the year in which the applicable Vesting Date (or the Participant’s termination date, as applicable) occurs. Upon such delivery, such Shares shall be fully assignable, saleable and transferable by the Participant, provided that any such assignment, sale, transfer or other alienation with respect to such Shares shall be in accordance with applicable securities laws.

Section 8.     Tax Liability; Withholding Requirements. The Participant shall be solely responsible for any applicable taxes (including, without limitation, income and excise taxes) and penalties, and any interest that accrues thereon, that the Participant incurs in connection with the receipt, vesting or settlement of any PSU granted hereunder. The Company shall be authorized to withhold from the Award the amount (in cash or Shares, or any combination thereof) of applicable

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withholding taxes due in respect of the Award, its settlement or any payment or transfer under the Award and to take such other action (including providing for elective payment of such amounts in cash or other property by the Participant) as may be necessary in the opinion of the Company to satisfy all obligations for the payment of such taxes; provided, however, that no Shares shall be withheld with a value exceeding the minimum amount of tax required to be withheld by law.

Section 9.     Recoupment/Clawback. The Participant hereby acknowledges and agrees that in order to comply with applicable law (including, without limitation, the Dodd-Frank Wall Street Reform and Consumer Protection Act), the Committee retains the right at all times to decrease or terminate all awards and payments under the Plan, and any and all amounts payable under the Plan, or paid under the Plan, shall be subject to clawback, forfeiture, and reduction to the extent determined necessary to comply with applicable law, including as a result of risk-related events.

Section 10.     No Right to Continued Employment.Neither the Plan nor this Award Agreement shall confer upon the Participant any right to continue to be employed by the Company and the receipt of the Award does not confer any rights on the Participant other than those expressly set forth in this Award Agreement or the Plan.

Section 11.     Section 409A of the Code. This Award Agreement is intended to comply with the requirements of Section 409A of the Code and the regulations thereunder, and the provisions of this Award Agreement shall be interpreted in a manner that satisfies the requirements of Section 409A of the Code, and this Award Agreement shall be operated accordingly. If any provision of this Award Agreement or any term or condition of the PSUs would otherwise conflict with this intent, the provision, term or condition shall be interpreted and deemed amended so as to avoid this conflict. Notwithstanding anything else in this Award Agreement, if the Board considers a Participant to be a “specified employee” under Section 409A of the Code at the time of such Participant’s “separation from service” (as defined in Section 409A of the Code), and the amount hereunder is “deferred compensation” subject to Section 409A of the Code any distribution that otherwise would be made to such Participant with respect to PSUs as a result of such separation from service shall not be made until the date that is six months after such separation from service, except to the extent that earlier distribution would not result in such Participant’s incurring interest or additional tax under Section 409A of the Code. If the Award includes a “series of installment payments” (within the meaning of Section 1.409A-2(b)(2)(iii) of the Treasury Regulations), the Participants’ right to the series of installment payments shall be treated as a right to a series of separate payments and not as a right to a single payment. Notwithstanding the foregoing, the tax treatment of the benefits provided under this Award Agreement is not warranted or guaranteed, and in no event shall the Company be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by the Participant on account of non-compliance with Section 409A of the Code.

Section 12. Miscellaneous.

(a)    Definitions. For purposes of this Award Agreement:

i.     “Cause” means:

(1)     the Participant’s indictment for, conviction of, plea of guilty or of nolo contendere to by the Participant for the commission of any: (a) felony, (b) criminal offense within the scope of Section 19 of the Federal Deposit Insurance Act, 12 U.S.C. § 1829, or (c) misdemeanor involving dishonesty;

(2)     the Participant commits a material breach of his obligations under the Amended and Restated Executive Employment Agreement between the Company and

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the Participant, dated as of May 5, 2016 (the “Employment Agreement”), or repeats or continues after written warning any material breach of his obligations thereunder, or is, in the opinion of the Board, guilty of gross misconduct which brings him or the Company or any of its affiliates into disrepute;

(3)     the Participant is guilty of dishonesty in the conduct of his duties, gross incompetence, willful neglect of duty, or of mismanagement of his financial affairs through failure to observe the Company’s rules and procedures for the operation of bank accounts and/or borrowings;

(4)     the Participant commits any act of bankruptcy or takes advantage of any statute for the time being in force offering relief to insolvent debtors; or

(5)     as a result of any default on the part of the Participant, he is prohibited by law from acting as an officer of the Company or any of its affiliates.

ii.     “Competitive Group” includes JP Morgan Chase, Bank of America, Citigroup, Wells Fargo, US Bancorp, Regions Financial Corp., M&T Bank Corp., PNC, Fifth Third, Sun Trust, Comerica, KeyCorp, BB&T, Capital One, and TD Bank.

iii.“Covered Employee” means any person who was employed by the Company at any time within twelve (12) months prior to the time of the act of solicitation and was also employed by the Company or any of its subsidiaries or affiliates on the date of the Participant’s termination of employment.

iv.     “Detrimental Activity” includes the following:

(1)     whether for the Participant’s own account or for any other person or entity: (a) hiring, employing, soliciting for employment or hiring, or attempting to solicit for employment or hire any Covered Employee; or (ii) otherwise interfering with the relationship between any Covered Employee and the Company. Notwithstanding anything herein to the contrary, the Company agrees that the Participant shall not be deemed in violation of this Section if an entity with which the Participant is associated hires or engages any employee of the Company or any of its subsidiaries, if the Participant was not, directly or indirectly, involved in hiring or identifying such person as a potential recruit or assisting in the recruitment of such employee; or

(2)     whether for the Participant’s own account or for any other person or entity, through any corporation, partnership or other business entity of any kind, soliciting, assisting in soliciting for business or enticing away or in any manner attempting to persuade any client or customer or prospective client or customer to discontinue or diminish his, her or its relationship or prospective relationship with the Company, or otherwise provide business to any person, corporation, partnership or other business entity of any kind other than the Company; provided, however, that general solicitation through advertisement shall not constitute solicitation for purposes of this provision. The restrictions in this Section shall apply only to: (1) clients, customers or prospective clients or customers introduced to the Participant by the Company; or (2) any customer of the Company (whether previously known to the Participant or introduced to the Participant through the Company) with whom the Participant had contact during the Participant’s employment by the Company (including any notice period); or (3) any customer or client of the Company whose identity as a client or potential client became known to the Participant as a result of the Participant’s employment with the Company.

The Participant agrees that the foregoing restrictions are reasonable and necessary to protect the Company’s business and that the grant of this Award, along with the benefits and attributes of the

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Participant’s employment by the Company, is good and valuable consideration to compensate the Participant for agreeing to these restrictions.

v.     “Disability” means the Participant’s physical or mental incapacitation such that the Participant is unable for a period of six (6) months or for an aggregate of six (6) months in any twenty-four (24) consecutive month period to perform the Participant’s duties.

vi.     “Good Reason” means any of the following:

(1)a material breach by the Company of the Employment Agreement;

(2)    substantial diminution or other substantial adverse change, not consented to by the Participant, in the nature or scope of the Participant’s responsibilities, authorities, powers, functions or duties or in the Participant’s base salary, save that removal of the role of Chairman of the Company from the Participant’s remit shall not amount to Good Reason (although for the avoidance of doubt the Company has not determined this matter and any such decision will be taken with consideration of any such factors as the Board believes relevant).

Provided, however, that the Participant must give written notice to the Company within 60 days of the initial existence of any of the foregoing changes, the Company shall have 30 days upon receipt of such notice to remedy the condition so as to eliminate the Good Reason, and if not remedied, the Participant’s employment must terminate no later than 60 days following the expiration of such cure period. Notwithstanding the foregoing, the Participant’s continued employment shall not constitute a waiver of the Participant’s rights with respect to any circumstance constituting Good Reason under this Award Agreement.

vii.    “Performance Period” means the three-year period beginning on January 1, 2016 and ending on December 31, 2018.

viii.     “Performance Period Start Date” means the date that the Performance Period begins, as set forth in Section 12(a)(vii).

(b)    Notices. All notices, requests and other communications under this Award Agreement shall be in writing and shall be delivered in person (by courier or otherwise), mailed by certified or registered mail, return receipt requested, or sent by facsimile transmission or by e-mail or any other form of electronic transmission or delivery approved by the Committee, as follows:

if to the Company, to:

Citizens Financial Group, Inc.
600 Washington Blvd.
Stamford, CT 06901
Attention: Corporate Secretary

if to the Participant, to the address that the Participant most recently provided to the Company,

or to such other address, facsimile number, e-mail address or such other form of electronic transmission or delivery as such party may hereafter specify for the purpose by notice to the other parties hereto. All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. on a business day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed

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received on the next succeeding business day in the place of receipt. Notwithstanding anything to the contrary contained in this Award Agreement or in the Plan, the Company may, in its sole discretion, deliver and, by acceptance of this grant, the Participant hereby explicitly and unambiguously consents and agrees to the receipt and delivery of, any notices permitted or required hereunder, documents related to any Awards granted under the Plan and/or any other information (including, without limitation, information required to be delivered to the Participant pursuant to applicable securities laws) regarding the Company and the Subsidiaries or the Plan by electronic means, including but not limited to through the Participant’s electronic account, through another on-line or electronic account system established and maintained by the Company or another third party designated by the Company or via the Company website. Such consent shall remain in effect throughout the Participant’s term of employment or service with the Company and thereafter until withdrawn in writing by the Participant. The Participant acknowledges that the Participant may receive from the Company a paper copy of any notices or documents delivered electronically at no cost to the Participant by contacting the Company by telephone or in writing.

(c)    Entire Agreement. This Award Agreement and the Plan (including the terms specified in the Participant’s electronic account, as noted in Section 1 and Section 6 above) constitute the entire agreement and understanding between the parties in respect of the subject matter hereof and supersede all prior and contemporaneous arrangements, agreements and understandings, both oral and written, whether in term sheets, presentations or otherwise, between the parties with respect to the subject matter hereof.

(d)    Severability. If any provision of this Award Agreement is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction, or would disqualify the Plan or this Award Agreement under any law deemed applicable by the Board, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Board, materially altering the intent of this Award Agreement, such provision shall be stricken as to such jurisdiction, and the remainder of this Award Agreement shall remain in full force and effect.

(e)    Amendment; Waiver. No amendment or modification of any provision of this Award Agreement that has a material adverse effect on the Participant shall be effective unless signed in writing by or on behalf of the Company and the Participant, provided that the Company may amend or modify this Award Agreement without the Participant’s consent in accordance with the provisions of the Plan or as otherwise set forth in this Award Agreement. No waiver of any breach or condition of this Award Agreement shall be deemed to be a waiver of any other or subsequent breach or condition, whether of like or different nature. Any amendment or modification of or to any provision of this Award Agreement, or any waiver of any provision of this Award Agreement, shall be effective only in the specific instance and for the specific purpose for which made or given.

(f)    Assignment. Neither this Award Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by the Participant.

(g)    Successors and Assigns; No Third-Party Beneficiaries. This Award Agreement shall inure to the benefit of and be binding upon the Company and the Participant and their respective heirs, successors, legal representatives and permitted assigns. Nothing in this Award Agreement, express or implied, is intended to confer on any Person other than the Company and the Participant, and their respective heirs, successors, legal representatives and permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Award Agreement.

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(h)    Governing Law; Waiver of Jury Trial. This Award Agreement shall be governed by the laws of the State of Delaware, without application of the conflicts of law principles thereof. By acknowledging this Award Agreement electronically or signing it manually, as applicable, the Participant waives any right that the Participant may have to trial by jury in respect of any litigation based on, arising out of, under or in connection with this Award Agreement or the Plan.

(i)    Discretionary Nature. The grant of the PSUs does not create any contractual right or other right in the Participant to receive any PSUs or other Awards in the future. Future grants of Awards, if any, shall be at the sole discretion of the Company.

(j)    Participant Undertaking; Acceptance. The Participant agrees to take whatever additional action and execute whatever additional documents the Company may deem necessary or advisable to carry out or give effect to any of the obligations or restrictions imposed on either the Participant or the PSUs pursuant to this Award Agreement. The Participant acknowledges receipt of a copy of the Plan and this Award Agreement and understands that material definitions and provisions concerning the PSUs and the Participant’s rights and obligations with respect thereto are set forth in the Plan. The Participant has read carefully, and understands, the provisions of this Award Agreement and the Plan.

(k)    Dispute Resolution. Except as provided in the last sentence of this paragraph to the fullest extent permitted by law, the Company and the Participant agree to waive their rights to seek remedies in court, including but not limited to rights to a trial by jury. The Company and each Participant agree that any dispute between or among them and/or their affiliates arising out of, relating to or in connection with this Plan shall be resolved in accordance with a confidential two-step dispute resolution procedure involving: (a) Step One: non-binding mediation, and (b) Step Two: binding arbitration under the Federal Arbitration Act, 9 U.S.C. § 1, et. seq., or state law, whichever is applicable. Any such mediation or arbitration hereunder shall be under the auspices of the American Arbitration Association (“AAA”) pursuant to its then current AAA Commercial Arbitration Rules. No arbitration shall be initiated or take place with respect to a given dispute if the parties have successfully achieved a mutually agreed to resolution of the dispute as a result of the Step One mediation. The mediation session(s) and, if necessary, the arbitration hearing shall be held in the city/location selected by the Company in its sole discretion. The arbitration (if the dispute is not resolved by mediation) shall be conducted by a single AAA arbitrator, selected by the Company in its sole discretion. Any award rendered by the arbitrator, including with respect to responsibility for AAA charges (including the costs of the mediator and arbitrator), shall be final and binding, and judgment may be entered on it in any court of competent jurisdiction. In the unlikely event the AAA refuses to accept jurisdiction over a dispute, the Company and each Participant agree to submit to JAMS (formerly known as Judicial Arbitration and Mediation Services) mediation and arbitration applying the JAMS equivalent of the AAA Commercial Arbitration Rules. If AAA and JAMS refuse to accept jurisdiction, the parties may litigate in a court of competent jurisdiction.

(l)    Captions. Captions provided herein are for convenience only and shall not affect the scope, meaning, intent or interpretation of the provisions of this Award Agreement.

(m)    Nature of Payments. Any and all grants or deliveries related to the PSUs hereunder shall constitute special incentive payments to the Participant and shall not be taken into account in computing the amount of salary or compensation of the Participant for the purpose of determining any retirement, death or other benefits under (i) any retirement, bonus, life insurance or other employee benefit plan of the Company, or (ii) any agreement between the Company and the Participant, except as such plan or agreement shall otherwise expressly provide.

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(n)    Data Privacy. The Participant understands that the Company and its affiliates hold certain personal information about the Participant, including but not limited to the Participant’s name, home address and telephone number, birthdate, social insurance number or other identification number, compensation, details of all Awards or any other entitlement to Shares for the purpose of administering the Plan (the “Data”). As a condition of receipt of this Award, the Participant explicitly consents to the collection, use, transfer and retention, in electronic or other form, of the Data by and among, as applicable, the Company, its affiliates and any third parties assisting the Company in administration of the Plan (including but not limited to any broker or other third party with whom the Participate may elect to deposit Shares), in each case, for the purpose of administering the Participant’s participation in the Plan.

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EXHIBIT I

I-1

EX-10.4

Exhibit 10.4

EXECUTIVE EMPLOYMENT AGREEMENT

This EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is made as of March 18, 2016 by and between Citizens Financial Group, Inc. (the “Company”) and Randy Black (“Executive”).

WHEREAS the Company desires to employ Executive and to enter into this Agreement embodying the terms of such employment; and

WHEREAS Executive desires to accept such employment and enter into this Agreement.

NOW, THEREFORE, in consideration of the promises and mutual covenants herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

Section 1. Employment At-Will

(a)Executive’s employment with the Company shall be strictly "at-will" and not for any fixed term. Executive understands and acknowledges that no statement, whether written or verbal, by the Company or any of its officers, employees or representatives may in any way modify, alter, or change the strictly "at-will" nature of Executive's employment relationship with the Company. Both Executive and the Company retain the right to terminate employment at any time, for any reason or no reason. Executive understands and agrees that, as an at-will employee, the Company may terminate Executive's employment without advance notice. Executive may terminate his or her employment for any reason (a “Resignation”) effective ninety (90) days following delivery of written notice of termination to the Chief Financial Officer (the “Notice Period”).

(b)Upon receipt of Executive's written notice of Resignation, the Company may, in its sole discretion, waive or shorten the Notice Period, in which case Executive will be permitted to terminate employment immediately or at a time designated by the Company. Under such circumstances, the Company will not be obliged to pay any amount in lieu of notice. Alternatively, the Company may direct Executive not to report to work unless otherwise requested by the Company (the “Garden Leave”). During any period of Garden Leave, as during any Notice Period:

(i)Executive will remain an employee of the Company and will continue to be paid Executive's then base salary and be eligible for employee benefits. However, Executive shall not be entitled to receive variable compensation.

(ii)    Executive will be expected to continue to undertake such duties and responsibilities as are assigned to Executive by the Chief Financial Officer, including duties to assist the Company with Executive's transition from the Company and maintaining the Company’s business, business relationships, and goodwill. Notwithstanding the foregoing, the Company reserves the right to suspend any or all of Executive’s duties and powers and to relocate Executive’s office to Executive’s personal residence for all or part of the Garden Leave.

(iii)    Executive will remain bound by all fiduciary duties and obligations owed to the Company and remain required to comply with all Company policies and practices and the provisions of this Agreement.

(iv)    Executive may not, without the prior written consent of the Company or except in the discharge of duties and responsibilities in accordance with clause (ii) above, contact or attempt to contact any client, customer, potential client or customer, agent, professional advisor, employee, supplier or broker of the Company or any of its parents, subsidiaries, affiliates or their respective successors.

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Exhibit 10.4

Section 2. Position

(a)    Commencement Date. The Executive's employment with the Company shall commence on April 18, 2016 (the "Commencement Date").

(b)    Position. During Executive’s employment, Executive shall serve as Controller and Chief Accounting Officer of the Company or in such other capacity of like status as the Company requires. In this position, Executive shall report directly to the Chief Financial Officer, or to such other person as the Company may specify from time to time.Notwithstanding anything else contained within this Agreement, the Company shall be entitled from time to time to appoint one or more persons to act jointly with Executive, in its sole discretion.

(c)    Best Efforts. During Executive’s employment, Executive shall: (i) devote Executive’s full professional time, attention, skill and energy to the performance of his or her duties for the Company and its parents, subsidiaries, affiliates or their respective successors (collectively, the "Company Affiliates" and each a "Company Affiliate"); (ii) use Executive's best efforts to dutifully, faithfully and efficiently perform his or her duties hereunder, comply with the policies, procedures, bylaws, rules, code of conduct and practices of the Company Affiliates, as the same may be amended from time to time, and obey all reasonable and lawful directions given by or under the authority of the Chief Financial Officer; (iii) refrain from engaging in any other business, profession or occupation for compensation or otherwise which would conflict, directly or indirectly, with the rendition of services to the Company, without the prior written consent of the Chief Financial Officer of the Company; except that Executive may engage in charitable and community activities and manage Executive's personal investments provided that such activities do not materially interfere with the performance of his or her duties hereunder or conflict with the conditions of his or her employment; and (iv) refrain from engaging in any conduct prejudicial to the interests and reputation of any Company Affiliate and endeavor to promote and extend the business of the Company Affiliates and protect and further their interests and reputation.

(d)    Directorships. Executive may be required, in the sole discretion of the Company, to perform services for any Company Affiliate and may be required to undertake the role and duties of an officer or director of any Company Affiliate. No additional compensation will be paid in respect of these appointments.

(e)    Location. During the period of Executive’s employment, Executive shall be based in Cranston, Rhode Island but may be relocated within a fifty (50) mile radius of the same location at the Company’s sole discretion. Additionally, Executive may be required to travel internationally or domestically in the performance of his or her duties.     

Section 3. Compensation

(a)     Base Salary.The Company shall pay Executive a base salary at the initial annualized rate of $400,000 (“Base Salary”) in accordance with the Company’s regular payroll schedule. Executive shall be entitled to increases in Base Salary as may be determined from time to time in the sole discretion of the Company.

(b)    Variable Compensation. Executive will be eligible to participate in the Company's discretionary award program, as amended from time to time. For performance year 2016 only, Executive shall receive a guaranteed award of $450,000 (the “2016 Guaranteed Award”). For purposes of clarity, this award is in lieu of any additional discretionary award for the 2016 performance year. For years subsequent to 2016, Executive's bonus award will be determined in the sole discretion of the Company, based on a mix of factors, including but not limited to individual, team and Company performance as well as external economic considerations. For years subsequent to 2016, with no guarantee, the current annual award opportunity for your role would be $450,000, at the sole discretion of the Company, based on achievement against the mix of factors described above.

2

Exhibit 10.4

Discretionary awards are determined annually based on a mix of factors including but not limited to individual, team and Company performance as well as external economic considerations and may be awarded in cash, equity-based instruments, or in any other form and may also be deferred in full or in part, as determined by the Company. The form and the timing of payment of Executive’s award, as well as other terms and conditions, will be consistent with awards granted to similarly situated colleagues. Any award Executive receives will be subject to applicable tax and other required withholdings.

The cash portion of any award will be paid by March 15^th following the determination of awards, and any equity-based instruments will be granted as soon as practicable following the determination of awards, in each case, provided that Executive remains employed by the Company on the payment date or grant date (as applicable) and neither Executive nor the Company has given notice to terminate Executive’s employment prior to the payment date or grant date (as applicable). However, with respect to the 2016 Guaranteed Award, if Executive’s employment terminates prior to the equity grant date or cash payment date (as applicable) under the following circumstances, Executive will remain entitled to receive the award:

•Death

•Disability

•Retirement with the approval of the Company

•Termination of employment by the Company without cause

Any equity-based instruments granted as part of Executive’s award will be governed by the applicable equity plan document and award agreement. In the event of any conflict between information contained in this document and the plan or award agreement provisions, the terms of the plan and award agreement will govern.

Receiving an award under the discretionary award program in certain years does not guarantee payment or level of award in any subsequent year and any award may be forfeited or reduced (i.e. subject to clawback) as determined appropriate by the Company in its sole discretion. The Company reserves the right to change the rules of any compensation plan or program or to cancel any such plan or program at any time without prior notice in its sole and absolute discretion. 

Section 4. Buy-Out

To recognize that you will forfeit existing entitlements with your current employer a result of joining the Company, you will receive a buy-out award subject to approval by the Compensation and Human Resources Committee of the Board of Directors or its delegate. This award will be granted partially as a cash award and partially as a restricted stock unit award.

The grant of your awards is subject to you providing the following documents to the company within 45 days of your Commencement Date: (1) Statement or other documentation reflecting the forfeiture of your award; and (2) Documentation regarding the terms of your forfeited award (plan document and award agreement, or other applicable document). If satisfactory documentation is not provided within 45 days of your Commencement Date, you will forfeit the right to receive your awards for no consideration.

Cash Portion

Your cash buy-out award has been valued at $200,000 and will become vested on the six month anniversary of your Commencement Date.

Equity-Based Portion

Your restricted stock unit buy-out award has been valued at $640,000 and will become vested on the third anniversary of your Commencement Date. Your award will be granted under the Citizens

3

Exhibit 10.4

Financial Group, Inc. 2014 Omnibus Incentive Plan and the number of restricted stock units subject to your award will be determined by dividing the award value by the average closing price of Company shares for the five trading days prior to your Commencement Date.

Terms of Awards

Your awards will be granted pursuant to award agreements which will include the terms and conditions of your awards. You will be required to acknowledge the terms of your award agreements through Fidelity's online system before your awards are processed.

Among other terms, your award agreements will provide that if, within 12 months of your Commencement Date, your employment terminates or notice to terminate your employment is given by either party for any reason other than death, disability, Retirement (as defined in the award agreement) or termination by the company without Cause (as defined in the award agreement), you will be responsible for repaying to the company the net value (following any applicable tax and other statutory deductions) of any cash installments or company shares that have been received by you. Repayment shall be due within 14 calendar days of the date of termination of your employment. If such termination occurs prior to the final instalment of your award is paid or becomes vested, you will also forfeit the right to receive any outstanding unpaid or unvested instalments for no consideration.

Section 5. Employee Benefits, Medical Exam, Paid Time Off, Reimbursement of Expenses

(a)    Employee Benefits. Executive may participate in and receive benefits under any and all benefit plans offered to similarly-situated employees of the Company, subject to the terms and conditions of those plans, policies and programs that are in effect from time to time. The Company reserves the right to amend the terms and conditions of its employee benefits and the related plans, policies and programs at any time, in the Company's sole discretion.

(b)    Medical Exam. Executive shall at any time (including during any period of incapacity) at the request and expense of the Company submit to medical examinations by a medical practitioner nominated by the Company, to the extent permitted by applicable federal and state law. Executive agrees, and hereby authorizes, that the results of any such medical examination be disclosed to the Company, subject to the provisions of the United States Health Insurance Portability and Accountability Act of 1996.

(c)    Paid Time Off. Executive shall be entitled to 27 days of paid time off (“PTO”) annually, which may be scheduled as time off away from work in accordance with the Company’s current PTO policy. For the year in which the Commencement Date occurs, Executive’s PTO will be pro-rated based on the 1^st of the month following his date of hire.

(d)    Reimbursement of Business Expenses. Reasonable, customary and necessary travel, entertainment and other business expenses incurred by Executive in the performance of his or her duties hereunder shall be reimbursed by the Company in accordance with the Company’s policies, subject to the provision of documentation regarding such expenses.

(e)    Relocation. The Company will reimburse you for reasonable relocation expenses associated with your move from Hockessin, DE to Cranston, RI, in accordance with the terms of the relocation package that has been forwarded to you separately.  All relocation expenses must be appropriately documented and will be treated as income to you.  As a condition of this offer you are also required to execute the Relocation Repayment Agreement.

4

Exhibit 10.4

Section 6. Compliance with the Company's Personal Securities Transactions Policy

Executive is subject to the Company's Personal Securities Transactions Policy, which sets forth the required procedures and processes with respect to purchases and sales of Company securities.

Section 7. Non-Solicitation

(a)     Non-Solicitation of Employees. Executive agrees that, at any time during Executive's employment and for twelve (12) months following the date Executive ceases to be employed by the Company for any reason (the "Restricted Period"), Executive shall not, directly or indirectly, whether for his or her own account or for any person or entity other than the Company hire, employ, solicit for employment or hire, or attempt to solicit for employment or hire, any person who is employed by any Company Affiliate during the Restricted Period, nor shall Executive directly or indirectly induce any such employee to terminate his or her employment or accept employment with anyone other than a Company Affiliate, or otherwise interfere with the relationship between any Company Affiliate and any of its employees during the Restricted Period. Anything to the contrary notwithstanding, the Company agrees that Executive shall not be deemed in violation of this Section 7(a) if an entity with which Executive is associated hires or engages any employee of a Company Affiliate, if Executive was not, directly or indirectly, involved in hiring or identifying such person as a potential recruit or assisting in the recruitment of such employee.

(b)    Non-Solicitation of, and Non-Interference with, Customers and Prospective Clients. Executive agrees that during his or her employment and during the Restricted Period, Executive shall not, directly or indirectly, for any person or entity other than the Company, solicit or assist in soliciting for business any customer of any Company Affiliate, nor will Executive induce or encourage any such customer to discontinue or diminish his, her or its relationship or prospective relationship with any Company Affiliate, or divert business away from any Company Affiliate; provided, however, that general solicitation through advertisement shall not constitute solicitation for purposes of this provision.

(c)    Representations. Executive agrees that all of the foregoing restrictions are reasonable and necessary to protect the Company’s business and its Confidential Information and that Executive's employment by the Company, along with the benefits and attributes of that employment, is good and valuable consideration to compensate him or her for agreeing to all restrictions contained in this Agreement. Executive also acknowledges, represents and warrants that his or her knowledge, skills and abilities are sufficient to permit Executive to earn a satisfactory livelihood without violating these provisions. Further, Executive agrees that he or she shall not, following the termination of Executive's employment with the Company, represent or hold himself or herself out as being in any way connected with the business of the Company.

(d)    Blue Pencil. It is expressly understood and agreed that although Executive and the Company consider the restrictions contained in this Section 7 to be reasonable, if a final judicial determination is made by an arbitrator or a court of competent jurisdiction that the time or territory or any other restriction contained in this Agreement is an unenforceable restriction against Executive, the provisions of this Agreement shall not be rendered void but shall be deemed amended to apply as to such maximum time and territory and to such maximum extent as such court may judicially determine or indicate to be enforceable. Alternatively, if an arbitrator or a court of competent jurisdiction finds that any restriction contained in this Agreement is unenforceable, and such restriction cannot be amended so as to make it enforceable, such finding shall not affect the enforceability of any of the other restrictions contained herein.

Section 8. Confidentiality; Ownership of Materials; Duty to Return Company Property

(a)    Confidential Information. Executive may not at any time (whether during his or her employment or after termination) disclose to any unauthorized person, firm or corporation or use or attempt to use for his or her own advantage or to the advantage of any other person, firm or corporation, any confidential information relating to the business affairs or trade secrets of any Company Affiliate, or any confidential information about (howsoever obtained) or provided by any third party received during the course of or as a result of his or her

5

Exhibit 10.4

employment (the “Confidential Information”). Confidential Information includes, but is not limited to, information relating to employees, customers and suppliers (former, actual and potential), Company contracts, pricing structures, financial and marketing details, business plans, any technical data, designs, formulae, product lines, intellectual property, research activities and any information which may be deemed to be commercially or price sensitive in nature, whether printed, typed, handwritten, videotaped, transmitted or transcribed on data files or on any other type of media, including but not limited to electronic and digital media, whether or not labeled as “confidential”. It also includes, without limitation, any information contained in documents marked “confidential” or documents of a higher security classification and other information which, because of its nature or the circumstances in which Executive receives it, Executive should reasonably consider to be confidential. The Company reserves the right to modify the categories of Confidential Information from time to time.

(b)    Exclusions. The provisions of this Section 8 shall not apply to:

(i)    Information or knowledge which subsequently comes into the public domain other than by way of unauthorized use or disclosure by Executive;

(ii)    The discharge by Executive of his or her duties hereunder or where his or her use or disclosure of the information has otherwise been properly authorized by the Company;

(iii)    Any information which Executive discloses in accordance with applicable public interest disclosure legislation; or

(iv)    Any disclosure required by law or by any court, arbitrator, mediator or administrative or legislative body (including any committee thereof) with jurisdiction to order Executive to disclose or make accessible any information.

(c)    Due Care. Executive shall exercise all due care and diligence and shall take all reasonable steps to prevent the publication or disclosure by Executive of any Confidential Information relating, in particular, but not limited to, actual or proposed transactions, of any employee, customer, client or supplier (whether former, actual or potential) of any Company Affiliate including partnerships, companies, bodies, and corporations having accounts with or in any way connected to or in discussion with any Company Affiliate and all other matters relating to such customers, clients or suppliers and connections.

(d)    Duty to Return Confidential Information and Other Company Property.

(i)    All reports, files, notes, memoranda, e-mails, accounts, documents or other material (including all notes and memoranda of any Confidential Information and any copies made or received by Executive in the course of his or her employment (whether during or after)) in any form, including but not limited to electronic and digital media, are and shall remain the sole property of the Company and, following Executive's termination of employment or at any other time upon the Company’s request, to the extent within his or her possession or control, shall be surrendered by Executive to the duly authorized representative of the Company.

(ii)    Executive agrees that upon termination of his or her employment with the Company for any reason, or at any other time upon the Company’s request, he will return to the Company immediately all memoranda, books, papers, plans, information, letters and other data in any form, including but not limited to electronic and digital media, all copies thereof or therefrom, in any way relating to the business of the Company, all other property of any Company Affiliate (including, but not limited to, company car, credit cards, equipment, correspondence, data, disks, tapes, records, specifications, software, models, notes, reports and other documents together with any extracts or summaries, removable drives or other computer equipment, keys and security passes) in his or her possession or under his or her control and Executive further agrees that Executive will not retain or use for his

6

Exhibit 10.4

or her own account at any time any trade names, trademark or other proprietary business designation used or owned in connection with the business of any Company Affiliate.

(e)    Reasonableness. Executive agrees that the undertakings set forth in this Section 8 and Section 9 are reasonable and necessary to protect the legitimate business interests of the Company both during, and after the termination of, Executive's employment, and that the benefits Executive receives under this Agreement are sufficient compensation for these restrictions.

Section 9. Intellectual Property and Developments

(a)    Executive agrees that all Developments are the sole and exclusive property of the Company and hereby assigns all rights to such Developments to the Company in all countries. Executive agrees, at the Company’s expense at any time during his or her employment or thereafter, to sign all appropriate documents and carry out all such reasonable acts as will be necessary to identify and preserve the legal protection of all Developments; however, the Company will have no obligation to compensate Executive for his or her time spent in connection with any assistance provided unless otherwise required by law. Notwithstanding the foregoing, Executive understands that no provision in this Agreement is intended to require assignment of any of his or her rights in an invention for which Executive can prove no equipment, supplies, facilities or Confidential Information or trade secret information of the Company was used, which invention was developed entirely on his or her own time, and which invention Executive can prove: (a) does not relate to the business of the Company or the actual or demonstrably anticipated research or development of the Company; or (b) does not result from any work performed by Executive for the Company.  To the extent compatible with applicable state law, these provisions do not apply to any invention which is required to be assigned by the Company to the United States Government.  Executive waives all moral rights in all Intellectual Property which is owned by the Company, or will be owned by the Company, pursuant to this Section 9.

For purposes of this section, “Developments” means all inventions, whether or not patentable, Confidential Information, computer programs, copyright works, mask works, trademarks and other intellectual property made, conceived or authored by Executive, alone or jointly with others, while employed by the Company, whether or not during normal business hours or on the Company’s premises, that are within the existing or contemplated scope of the Company’s business at the time such Developments are made, conceived, or authored or which result from or are suggested by any work Executive or others may do for or on behalf of the Company.

(b)    Executive agrees to promptly submit to the Company written disclosures of all inventions, whether or not patentable, which are made, conceived or authored by Executive, alone or jointly with others, while Executive is employed by the Company.

Section 10. Certain Agreements

(a)    Data Protection. Executive shall familiarize himself with and abide by the Company’s data protection policy, procedures and accountabilities. Executive acknowledges that any breach of these procedures may result in the immediate termination of his or her employment.

(b)    Personal Information. Executive acknowledges and agrees that the Company is permitted to hold personal information about him as part of its personnel and other business records and, in accordance with applicable law, may use such information in the course of the Company’s business.

(c)    Credit Data. The Company reserves the right, upon five (5) days prior written notice, to, and Executive agrees that the Company may, in accordance with applicable law, carry out searches about Executive through credit reference agencies or through the Company’s customer records at any time during his or her employment for purposes of identifying any serious debt or other significant financial difficulties of Executive for the purposes of detecting, eliminating or mitigating any particular risk of employee fraud or theft. The Company will only retain the information about Executive which the Company obtains from these searches

7

Exhibit 10.4

in accordance with applicable law and for so long as is needed for the purposes set out above (subject to any legal (including any regulatory) obligation which requires the Company to retain that information for a longer period). The credit reference agency will record details of the search but these will not be available for use by lenders to assess the ability of Executive to obtain credit. Executive has the right of access to his or her personal records held by credit reference agencies. The Company will supply the names and addresses of such agencies upon request, to help Executive to exercise his or her right of access to such records.

(d)    Indebtedness. For the reasons referred to above, the Company expects Executive to manage his or her personal finances responsibly. The Company requires that Executive draw to the attention of Executive's manager any serious debt or significant financial difficulties that he may have, including those which result in court action being taken against Executive.

Section 11.Remedies

The Company and Executive agree that it is impossible to measure solely in money the damages which will accrue to the Company by reason of his or her failure to observe any of the obligations of Sections 7, 8 or 9 of this Agreement. Therefore, if the Company shall institute any action or proceeding to enforce such provisions, Executive hereby waives the claim or defense that there is an adequate remedy at law and agrees in any such action or proceeding not to interpose the claim or defense that such remedy exists at law. Without limiting any other remedies that may be available to the Company, Executive hereby specifically affirms the appropriateness of injunctive or other equitable relief in any such action and acknowledges that nothing contained within this Agreement shall preclude the Company from seeking or receiving any other relief, including without limitation, any form of injunctive or equitable relief. Executive also agrees that, should he violate the provisions of Section 7 and its subsections such that the Company shall be forced to undertake any efforts to defend, confirm or declare the validity of the covenants contained within Section 7 of this Agreement, the time restrictions set forth therein shall be extended for a period of time equal to the pendency of any court proceedings, including appeals. Further, Executive agrees that, should the Company undertake any efforts to defend, confirm or declare the validity of any of the covenants contained in Sections 7, 8 or 9 of this Agreement, the Company shall be entitled to recover from Executive all of its reasonable attorneys’ fees and costs incurred in prosecuting or defending any such action or engaging in any such efforts.

Section 12. No Conflicts

Executive represents and warrants to the Company that on the Commencement Date, to the best of Executive’s knowledge, Executive’s acceptance of employment with, and performance of Executive’s duties for, the Company will not conflict with or result in a violation or breach of, or constitute a default under, any contract, agreement or understanding to which Executive is, or was, a party or of which Executive is aware and that there are no restrictions, covenants, agreements or limitations on Executive’s right or ability to enter into and perform the terms of this Agreement.

Section 13. Dispute Resolution; Mediation and Arbitration

Except as provided in the last sentence of this Section 13 to the fullest extent permitted by law, the Company and Executive agree to waive their rights to seek remedies in court, including but not limited to rights to a trial by jury. The Company and Executive agree that any dispute between or among them or their affiliates or related entities arising out of, relating to or in connection with this Agreement or Executive's employment with the Company, including but not limited to claims for discrimination or other alleged violations of any federal, state or local employment and labor law statutes, ordinances or regulations, will be resolved in accordance with a confidential two-step dispute resolution procedure involving: (1) Step One: non-binding mediation, and (2) Step Two: binding arbitration under the Federal Arbitration Act, 9 U.S.C. § 1, et. seq., or state law, whichever is applicable. Any such mediation or arbitration hereunder shall be under the auspices of the American Arbitration Association (“AAA”) pursuant to its then current Commercial Arbitration Rules and Mediation Procedures (the “AAA Commercial Rules”). Disputes encompassed by this Section 13 include

8

Exhibit 10.4

claims for discrimination arising under local, state or federal statutes or ordinances and claims arising under any state’s labor laws. Notwithstanding anything to the contrary in the AAA Commercial Rules, the mediation process (Step One) may be ended by either party to the dispute upon notice to the other party that it desires to terminate the mediation and proceed to the Step Two arbitration; provided, however, that neither party may so terminate the mediation process prior to the occurrence of at least one (1) mediation session with the mediator. No arbitration shall be initiated or take place with respect to a given dispute if the parties have successfully achieved a mutually agreed to resolution of the dispute as a result of the Step One mediation. The mediation session(s) and, if necessary, the arbitration hearing shall be held in the city nearest to Executive's office location during the course of Executive's employment with the Company or an alternative location mutually agreeable to Executive and the Company. The arbitration (if the dispute is not resolved by mediation) will be conducted by a single AAA arbitrator, mutually selected by the parties, as provided for by the AAA Commercial Rules. The Company will be responsible for the AAA charges, including the costs of the mediator and arbitrator. The Company and Executive agree that the arbitrator shall apply the substantive law of the State of New York to all state law claims and federal law to any federal law claims, that discovery shall be conducted in accordance with the AAA Commercial Rules or as otherwise permitted by law as determined by the arbitrator. In accordance with the AAA Commercial Rules (a copy of which is available through AAA’s website, www.adr.org), the arbitrator’s award shall consist of a written statement as to the disposition of each claim and the relief, if any, awarded on each claim. The Company and Executive understand that the right to appeal or to seek modification of any ruling or award by the arbitrator is limited under state and federal law. Any award rendered by the arbitrator will be final and binding, and judgment may be entered on it in any court of competent jurisdiction. Nothing contained herein shall restrict either party from seeking temporary injunctive relief in a court of law to the extent set forth in Section 11 hereof.

In the unlikely event the AAA refuses to accept jurisdiction over a dispute, Executive and the Company agree to submit to Judicial-Arbitration-Mediation Services (“JAMS”) mediation and arbitration applying the JAMS equivalent of the AAA Commercial Rules. If AAA and JAMS refuse to accept jurisdiction, the parties may litigate in a court of competent jurisdiction.

Section 14. Miscellaneous

(a)    Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard for the conflict of laws provisions thereof.

(b)    Entire Agreement and Amendments; Survivorship; Strict Construction.

(i)    This Agreement contains the entire understanding and agreement of the parties with respect to the subject matter hereof. There are no restrictions, agreements, promises, warranties, covenants or undertakings between the parties with respect to the subject matter herein other than those expressly set forth herein. This Agreement may not be altered, modified, or amended except by written instrument signed by the parties hereto, which attaches a copy of this Agreement.

(ii)    The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement to the extent necessary to the intended preservation of such rights and obligations.

(c)    Tax Compliance. All compensation paid to Executive is intended to, and is reasonably believed to, comply with Internal Revenue Code Section 409A (“Section 409A”) of the Internal Revenue Code of 1986, as amended, as well as other tax related laws and regulations to the extent it does not fall into any applicable exclusion, and shall be interpreted and construed consistent with that intent. Notwithstanding the foregoing, the Company makes no representations that the terms of this Agreement (and any compensation payable thereunder) comply with Section 409A, and in no event shall the Company be liable for any taxes, interest, penalties or other expenses that may be incurred by Executive on account of non-compliance with Section 409A. No expenses eligible for reimbursement, or in-kind benefits to be provided, during any calendar year shall affect the amounts eligible for reimbursement in any other calendar year, to the extent subject to the requirements of Section 409A, and no such right to reimbursement or right to in-kind benefits shall be

9

Exhibit 10.4

subject to liquidation or exchange for any other benefit. For purposes of Section 409A, each payment in a series of installment payments, if any, provided under this Agreement shall be treated as a separate payment. Any payments under this Agreement that may be excluded from Section 409A either as separation pay due to an involuntary separation from service or as a short-term deferral shall be excluded from Section 409A to the maximum extent possible. Any payments to be made under this Agreement upon a termination of employment shall only be made if such termination of employment constitutes a “separation from service” under Section 409A. Notwithstanding the foregoing and any provision in this Agreement to the contrary, if on the date of his termination of employment, Executive is deemed to be a “specified employee” within the meaning of Section 409A and any payment or benefit provided to Executive in connection with his termination of employment is determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A, then such payment or benefit due upon, or within the six-month period following, a termination of Executive’s employment (whether under his Agreement, any other plan, program, payroll practice or any equity grant) and which do not otherwise qualify under the exemptions under Treas. Reg. Section 1.409A-1 (including, without limitation, payments that constitute “separation pay” within the meaning of Section 409A), shall be paid or provided to Executive in a lump sum on the earlier of (a) the date which is six months and one day after Executive’s “separation from service” (as such term is defined in Section 409A) for any reason other than death, and (b) the date of Executive’s death, and any remaining payments and benefits shall be paid or provided in accordance with the payment dates specified in this Agreement for such payment or benefit.

(d)    No Waiver. The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver of such party’s rights or deprive such party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

(e)    Severability. In the event that any one or more of the provisions of this Agreement shall be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions of this Agreement shall not be affected thereby.

(f)    Assignment. This Agreement shall not be assignable by Executive. This Agreement shall be freely assignable by the Company without restriction.

(g)    Successors; Binding Agreement. This Agreement shall inure to the benefit of and be binding upon personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees, legatees and permitted assigns.

(h)    Notice. For the purpose of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered or three (3) business days after mailing registered mail, return receipt requested, postage prepaid or by recognized courier, addressed to the respective addresses set forth on the execution page of this Agreement, provided that all notices to the Company shall be directed to Neil Rosolinsky, Deputy General Counsel, Litigation & Employment, Citizens Bank, 30 Montgomery Street, 13^th floor, Jersey City, NJ 07302 or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt.

(i)    Withholding Taxes; Deductions. The Company may withhold from any amounts payable under this Agreement such federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation. Executive agrees that the Company may, at any time during, or in any event upon termination of his or her employment, deduct from Executive's compensation, any monies due by Executive to the Company for any overpayment made and/or outstanding loans, advances, relocation expenses and/or salary paid in respect of PTO that was taken but not earned, unless otherwise prohibited by law.

(j)    Counterparts; Effectiveness. This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

10

Exhibit 10.4

This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by the other party hereto, including by fax or electronic pdf.

[Signature page follows]

11

Exhibit 10.4

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.

EXECUTIVE

/s/ Randy Black______________________

Randy Black

706 Walnut Hill Road Hockessin, DE 19707

COMPANY

/s/ Susan LaMonica__________________

By: Susan LaMonica

Chief Human Resource Officer

Citizens Financial Group, Inc.

12

EX-10.5

Exhibit 10.5

EXECUTION VERSION

AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT

This AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is made as of May 5, 2016 (the “Effective Date”) by and between Citizens Financial Group, Inc. (the “Company”) and Bruce Van Saun (“Executive”) (certain capitalized terms used herein being defined in Section 13).

WHEREAS, Executive and the Company (as successor in interest of RBS Citizens Financial Group, Inc.) are party to that certain Executive Employment Agreement, dated October 1, 2013 and to that certain letter from Elaine Arden to Executive dated November 6, 2013 (collectively, the “Prior Agreement”);

WHEREAS, the Company desires to continue to employ Executive, under modified terms and conditions, with effect from the Effective Date and to enter into this Agreement embodying such modified terms and conditions;

WHEREAS, Executive desires to continue his employment pursuant to such modified terms and conditions and to enter into this Agreement; and

WHEREAS, as of the Effective Date, Executive and the Company mutually desire to terminate and supersede in its entirety the Prior Agreement upon effect of this Agreement without triggering any entitlement under the Prior Agreement or any bonus, incentive or compensation schemes or plans.

NOW, THEREFORE, in consideration of the promises and mutual covenants herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

Section 1. Employment At-Will

(a)Executive’s employment with the Company shall remain strictly “at-will”. Notwithstanding this and subject to the below, Executive’s employment under this Agreement shall be for an initial term of

1

Exhibit 10.5

five (5) years from the Effective Date (the “Initial Term”). At the conclusion of the Initial Term, this Agreement shall automatically renew for an additional two (2) year term unless, at least twelve (12) months prior to the expiry of the Initial Term, either the Company or Executive provide notice to the other of its or his election not to renew. In the event the Company elects not to renew the Initial Term, such nonrenewal shall constitute a termination of Executive’s employment by the Company without Cause. Executive understands and acknowledges that no statement, whether written or verbal, by the Company or any of its officers, employees or representatives may in any way modify, alter or change the strictly “at-will” nature of Executive’s employment relationship with the Company, and both Executive and the Company retain the right to terminate Executive’s employment at any time, for any reason or no reason, subject to the provisions of Sections 1(b) through (h) of this Agreement. It is acknowledged that for seniority purposes, Executive’s original hire date of September 8, 2009 with RBS remains in effect.

(b)Termination for Cause by the Company. Executive’s employment hereunder may be terminated at any time without prior notice by the Company for Cause, except that to the extent the act, omission or otherwise which forms the basis of the Cause termination may be cured to the Company’s satisfaction, the Company shall give Executive written notice specifying the basis for the Cause termination and what corrective steps Executive must take to cure, and Executive shall have a period of sixty (60) days to cure. For the avoidance of doubt, if the Company believes in good faith that the act, omission or otherwise underlying the Cause termination is not curable, the Company need not give written notice and an opportunity to cure. Additionally, in the event the Company does provide Executive with written notice and opportunity to cure, at the end of the sixty (60) day cure period, the determination as to whether a cure was accomplished shall rest in the Company’s sole discretion. The Company must act in good faith in making such a decision. Upon a termination for Cause, all outstanding unvested cash or equity awards will be immediately forfeited and Executive shall be entitled only to the Accrued Benefits.

(c)Termination by Reason of Death or Disability.

(i)Death

2

Exhibit 10.5

(A)Upon termination by reason of Executive’s death, Executive’s estate shall receive, in addition to the Accrued Benefits, a lump sum payment equal to: (i) Executive’s Base Salary, at the rate in effect at the time of Executive’s death, through the end of the month in which Executive’s death occurs; and (ii) a pro-rata portion of Executive’s target cash incentive for the year in which death occurs. Such lump sum payment shall be made within thirty (30) days of the termination due to Executive’s death.

(B)Treatment of Awards. Upon termination by reason of Executive’s death, any outstanding unvested cash or equity-based awards will become immediately vested and settled, with any performance-based awards vesting based on the target level of performance.

(ii)Disability

(A)Upon termination by reason of Executive’s Disability, Executive shall be entitled to receive, in addition to the Accrued benefits, Executive’s Base Salary at the rate in effect at the time of Executive’s Disability, through the earliest of (x) date on which Executive is first eligible to receive payment of long-term disability benefits under the Company’s employee benefit plans as then in effect, (y) the end of the short-term deferral period as of the date of termination or (z) the date Executive is no longer Disabled. Such continued Base Salary shall be paid in accordance with the Company’s normal payroll practices in effect from time to time.

(B)Treatment of Awards. Upon termination by reason of Executive’s Disability, any outstanding unvested cash or equity-based awards will remain outstanding and continue to vest on their original schedule, provided that the Executive complies with the provisions of Section 6(a) (regarding Non-Competition) during the entire remaining vesting period and Sections 6(b) and (c) (regarding Non-Solicitation of Employees, Customers and Prospective Clients) for twelve (12) months less any time spent on Garden Leave and/or any Notice Period. Violation of any of those provisions shall result in the forfeiture of remaining unvested awards.

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Exhibit 10.5

Unless specified otherwise above or elsewhere in this Agreement, all other benefits due to Executive following Executive’s termination for death or Disability shall be determined in accordance with the Company’s plans, policies and practices then in effect.

(d)Termination without Cause by the Company. The Company may terminate Executive’s employment for any reason other than Cause, death or Disability. At the Company’s sole discretion, such termination may be made effective immediately, may be effective at a later date as stated in such notice with the requirement that Executive continue working through such stated date, or the Company may direct Executive not to report to work unless otherwise requested by the Company (the “Garden Leave”).

(i)Severance. Upon termination of Executive by the Company without Cause, the Company shall pay to Executive a lump sum in cash equal to two times Executive’s then Base Salary, paid, subject to execution and non-revocation of the Release (as defined below), within thirty (30) days of the termination of Executive’s employment, provided, however, if under the Release Executive is permitted more than thirty (30) days to sign and not revoke the Release, such amount shall still be paid within such thirty (30)-day period, but Executive will be required to repay the foregoing amount to the Company unless the Release is executed and becomes irrevocable within the specified period. In addition, Executive shall be entitled to receive a pro-rata portion of Executive’s target cash incentive for the year in which termination occurs, not to exceed 2% of Pre-Tax Operating Income, as set forth in the Citizens Financial Group, Inc. Performance Formulate Incentive Plan (the “162(m) Plan”), or such other percentage of Pre-Tax Operating Income as may be set forth in any substitute plan which may be in effect during the year of termination. The pro-rata cash incentive award shall be paid to Executive at the same time cash incentive awards are paid to active employees. The foregoing payments are conditioned upon (x) there being an orderly handover by Executive of his responsibilities and (y) Executive executing and delivering to the Company a release of claims in substantially the form annexed hereto as Exhibit A (the “Release”). Any additional payments will be at the sole discretion of the Board or so designated sub-committee thereof. Such payments will be in substitution for any payment that may otherwise have been made to Executive pursuant to the Company’s then current severance practice or plan.

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Exhibit 10.5

(ii)Treatment of Awards. Upon termination of Executive by the Company without Cause, any outstanding unvested cash or equity-based awards will remain outstanding and continue to vest on their original schedule, provided that the Executive complies with the provisions of Sections 6(b) and (c) (regarding Non-Solicitation of Employees, Customers and Prospective Clients) for twelve (12) months less any time spent on Garden Leave and/or any Notice Period. Violation of any of those provisions shall result in the forfeiture of remaining unvested awards.

(e)Termination by Executive without Good Reason. Executive may terminate his employment without Good Reason effective six (6) months (or such shorter period as is mutually agreed in writing) following Executive’s delivery of Notice of Termination to the Board. Executive and the Company will mutually agree on how a pro-rata portion of Executive’s variable compensation (excluding performance-based awards) for the year in which Executive’s termination occurs will be payable, should Executive be required to work during such Notice Period. Any pro-rata payment of variable compensation that may be made to Executive under this Section 1(e) shall be subject to Executive executing and delivering to the Company the Release within the period specified by the Company. Subject to Section 1(m) of this Agreement, if the lump sum payment described in this Section 1(e) is to be paid, such payment shall be made at the same time as such payment is made to active employees.

(f)Termination by Executive for Good Reason. Executive may resign for Good Reason by providing written notice to the Company stating the basis of such resignation. Executive must give notice of the existence of the Good Reason condition(s) within sixty (60) days of the condition(s) first occurring. If the Company fails to cure the action or inaction that forms the basis of such resignation within thirty (30) days of receipt of such notice, then Executive’s employment will be terminated effective as of the last day of that thirty (30) day cure period. Upon such resignation for Good Reason, the Company shall pay to Executive a lump sum in cash equal to two times Executive’s then Base Salary, paid, subject to execution and non-revocation of the Release, within thirty (30) days of the termination of Executive’s employment, provided, however, if under the Release Executive is permitted more than thirty (30) days to sign and not revoke the Release, such amount shall still be paid within such thirty (30)-day period, but Executive will

5

Exhibit 10.5

be required to repay the foregoing amount to the Company unless the Release is executed and becomes irrevocable within the specified period. In addition, Executive shall be entitled to receive a pro-rata portion of Executive’s target cash incentive for the year in which termination occurs, not to exceed 2% of Pre-Tax Operating Income, as set forth in the Citizens Financial Group, Inc. Performance Formulate Incentive Plan (the “162(m) Plan”), or such other percentage of Pre-Tax Operating Income as may be set forth in any substitute plan which may be in effect during the year of termination. The pro-rata cash incentive award shall be paid to Executive at the same time cash incentive awards are paid to active employees. The foregoing payments are conditioned upon (x) there being an orderly handover by Executive of his responsibilities and (y) Executive executing and delivering to the Company the Release. Any additional payments will be at the sole discretion of the Board or so designated sub-committee thereof. Such payments will be in lieu of and not in addition to any payment that may otherwise have been made to Executive pursuant to the Company’s then current severance practice or plan.

(g)Treatment of Awards upon Termination by Executive (With or Without Good Reason). Because Executive has remained continuously employed with the Company for five (5) years (i.e. until September 8, 2014) and meets the Company’s current definition of Retirement, if Executive gives at least six (6) months’ Notice of Termination upon a voluntary resignation without Good Reason or complies with the notice provisions required in Section 1(f) in the event of termination for Good Reason, and there is an orderly handover by Executive of his responsibilities, then provided that in the opinion of the Board Executive has not committed any acts or made any omissions capable of giving rise to a termination for Cause, any outstanding unvested cash or equity-based awards will remain outstanding and continue to vest on their original schedule, provided that the Executive complies with the provisions of Section 6(a) (regarding Non-Competition) during the entire remaining vesting period and Sections 6(b) and (c) (regarding Non-Solicitation of Employees, Customers and Prospective Clients) for twelve (12) months less any time spent on Garden Leave and/or any Notice Period in the event of a Termination by Executive without Good Reason and the provisions of Sections 6(b) and (c) (regarding Non-Solicitation of Employees, Customers and Prospective Clients) for twelve (12) months less any time spent on Garden

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Exhibit 10.5

Leave and/or any Notice Period in the event of a Termination by Executive with Good Reason. Violation of any of those provisions shall result in the forfeiture of remaining unvested awards.

(h)Change of Control Termination.

(i)Severance. Subject to the conditions set out in this Section 1(h), if within twenty four (24) months of a Change of Control, Executive is terminated without Cause or resigns for Good Reason (in either case a “Change of Control Related Termination”), then Executive shall be entitled to receive a lump sum payment at the time specified herein equal to (i) three times the sum of Executive’s then Base Salary and Executive’s target cash incentive for the year in which termination occurs; plus (ii) pro-rata portion of Executive’s target cash incentive for the year in which termination occurs. The foregoing payments shall be made, subject to execution and non-revocation of the Release, within thirty (30) days of the termination of Executive’s employment, provided, however, if under the Release Executive is permitted more than thirty (30) days to sign and not revoke the Release, such amount shall still be paid within such thirty (30)-day period, but Executive will be required to repay the foregoing amount to the Company unless the Release is executed and becomes irrevocable within the specified period. Any payment made in accordance with this Section 1(h) shall be in lieu of and not in addition to any payments to which Executive may otherwise have been entitled in accordance with other sections of this Agreement and shall be in full and final settlement of all claims Executive may have arising out of or in connection with his employment or its termination. No payment shall be made in accordance with this Section 1(h)(i) unless none of the circumstances referred to in Section 1(h)(iii) apply as at the date of payment. In addition, in order to receive such payment, Executive must execute and deliver to the Company the Release. For the purposes of this Section 1(h), the Board shall determine whether a Change of Control has occurred and the Company shall determine whether any of the circumstances referred to in Section 1(h)(iii) apply; however, in the event of a disagreement between Executive and the Board, the matter shall be presented to the Company’s auditor for a final determination.

(ii)Treatment of Awards. Upon a Change of Control, any outstanding performance-based awards will be deemed to have satisfied the target level of performance. Upon a subsequent

7

Exhibit 10.5

Change of Control Related Termination, any outstanding cash or equity-based awards will become immediately vested and settled.

(iii)Conditions. No payments or acceleration of awards shall be payable in accordance with this Section 1(h) where:

(A)circumstances exist that would entitle the Company or the acquirer to terminate Executive’s employment for Cause; or

(B)any “clawback” provisions in the Company’s equity plans or otherwise have been triggered, resulting in clawback of compensation or the reduction of unvested compensation.

(i)Notice of Termination and Notice Period. Any purported termination of employment by the Company or by Executive shall be communicated by Notice of Termination to the other party hereto in accordance with the relevant subsection of Section 1 and Section 13 hereof.

(j)During any period of Garden Leave or Notice Period under this Section 1, the following will apply:

(i)Executive will remain an employee of the Company, will continue to be paid Executive’s then Base Salary, and will continue to be eligible for Employee Benefits;

(ii)Executive will be expected to continue to undertake such duties and responsibilities as are assigned to Executive by the Board, including duties to assist the Company with Executive’s transition from the Company and maintaining the Company’s business, business relationships and goodwill; but notwithstanding the foregoing, the Company reserves the right to suspend any or all of Executive’s duties and powers and to relocate Executive’s office to Executive’s personal residence for all or part of the Garden Leave;

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Exhibit 10.5

(iii)Executive will remain bound by all fiduciary duties and obligations owed to the Company and will remain required to comply with all Company policies and practices and the provisions of this Agreement;

(iv)Executive may not, unless with the prior written consent of the Company or in the discharge of duties and responsibilities in accordance with subsection (ii) above, contact or attempt to contact any client, customer, agent, professional adviser, employee, supplier or broker of the Company;

(v)Executive will not be permitted to work for any other organization or on Executive’s own behalf without the Company’s prior written consent, but may search for other employment opportunities, subject to Section 6 below; and

(vi)All other terms and conditions of Executive’s employment (both express and implied) and of this Agreement will remain in full force and effect until the end of the Garden Leave or Notice Period, and the terms of Sections 6, 7, 8, 9, 10 and 11 shall survive termination of this Agreement.

(k)Other Agreements. Executive agrees that termination of employment hereunder for any reason will be deemed an immediate resignation by Executive as a member of any board of directors of or other position with the Company. Executive also agrees to take such action as the Company deems reasonably necessary or desirable to evidence such resignation, and hereby irrevocably authorizes the Company to appoint a Person in Executive’s name and on Executive’s behalf to sign any documents and do any things necessary to effect such resignation should Executive fail to do so in a timely manner.

(l)In the case of any of the foregoing terminations, Executive (or Executive’s estate as the case may be) shall be entitled to receive: (1) any earned but unpaid amounts as of the date of termination, including but not limited to (x) the Base Salary through the date of termination, paid in a lump sum within thirty (30) days following termination, (y) reimbursement for business expenses in the normal course in accordance with the Company’s policies, paid in a lump sum within thirty (30) days following termination, and (y) any bonus and other incentive awards actually awarded and due, but not yet paid, as of the date of termination, paid at the time such payments are made to active employees; (2) payment in

9

Exhibit 10.5

lieu of accrued but unpaid vacation days for the year of termination through the date of termination, paid in a lump sum within thirty (30) days following termination; and (3) other payments and benefits, if any, in accordance with the terms of the Company’s plans and programs in which Executive participates, including the Company’s nonqualified deferred compensation plan (collectively, including the timing of payment or provision, the “Accrued Benefits”).

(m)Section 409A.

(i)The intent of the parties is that payments and benefits under this Agreement comply with or be exempt from Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations and guidance promulgated thereunder (collectively, “Section 409A”) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith or exempt therefrom. For purposes of Section 409A, Executive’s right to receive any installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments. Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g., “payment shall be made within thirty (30) days following the date of termination”), the actual date of payment within the specified period shall be within the sole discretion of the Company.

(ii)A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Section 409A and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.” If Executive is deemed on the date of termination to be a “specified employee” within the meaning of that term under Section 409A(a)(2)(B), then with regard to any payment or the provision of any benefit that is considered “deferred compensation” under Section 409A (whether under this Agreement, any other plan, program, payroll practice or any equity grant) that is due upon Executive’s separation from service, such payment or benefit shall not be made or provided until the date which is the earlier of (A) the expiration of the six (6)-month period measured from the date of Executive’s “separation from service” and (B) the date of

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Exhibit 10.5

Executive’s death (the “Delay Period”) and this Agreement and each such plan, program, payroll practice or equity grant shall hereby be deemed amended accordingly. Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this Section 1(m) (whether they would have otherwise been payable in a single lump sum or in installments in the absence of such delay) shall be paid or reimbursed to Executive in a lump sum on the first business day of the Delay Period, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.

(iii)All expenses or other reimbursements paid pursuant to this Agreement or otherwise that are taxable income to Executive shall in no event be paid later than the end of the calendar year next following the calendar year in which Executive incur such expense or pays such related tax. With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Section 409A, (x) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, (y) the amount of expenses eligible for reimbursement, or of in-kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year, provided that the foregoing clause (y) shall not be violated without regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely because such expenses are subject to a limit related to the period the arrangement is in effect and (z) such payments shall be made on or before the last day of Executive’s taxable year following the taxable year in which the expense occurred.

(n)Section 280G.

(i)If the aggregate of all amounts and benefits due to Executive under this Agreement or any other plan, program, agreement or arrangement of the Company or any of its Affiliates, which, if received by Executive in full, would constitute “parachute payments,” as such term is defined in and under Section 280G of the Code (collectively, “Change of Control Benefits”), reduced by all federal, state and local taxes applicable thereto, including the excise tax imposed pursuant to Section 4999 of the Code, is less than the amount Executive would receive, after all such applicable taxes, if Executive

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Exhibit 10.5

received aggregate Change of Control Benefits equal to an amount which is $1.00 less than three (3) times Executive’s “base amount,” as defined in and determined under Section 280G of the Code, then such Change of Control Benefits shall be reduced or eliminated to the extent necessary so that the Change of Control Benefits received by the Executive will not constitute parachute payments. If a reduction in the Change of Control Benefits is necessary, reduction shall occur in the following order unless the Executive elects in writing a different order, subject to the Company’s consent (which shall not be unreasonably withheld or delayed): (i) severance payment based on multiple of Base Salary and/or annual bonus; (ii) other cash payments; (iii) any annual incentive compensation paid as severance; (iv) acceleration of vesting of stock options with an exercise price that exceeds the then fair market value of stock subject to the option, provided such options are not permitted to be valued under Treasury Regulations Section 1.280G-1 Q/A – 24(c); (v) any equity awards accelerated or otherwise valued at full value, provided such equity awards are not permitted to be valued under Treasury Regulations Section 1.280G-1 Q/A – 24(c); (vi) acceleration of vesting of stock options with an exercise price that exceeds the then fair market value of stock subject to the option, provided such options are permitted to be valued under Treasury Regulations Section 1.280G-1 Q/A – 24(c); (vii) acceleration of vesting of all other stock options and equity awards; and (viii) within any category, reductions shall be from the last due payment to the first.

(ii)It is possible that after the determinations and selections made pursuant to Section 1(n)(i) above, Executive will receive Change of Control Benefits that are, in the aggregate, either more or less than the amounts contemplated by Section 1(n)(i) above (hereafter referred to as an “Excess Payment” or “Underpayment,” respectively). If there is an Excess Payment, Executive shall promptly repay the Company an amount consistent with this Section 1(n)(ii). If there is an Underpayment, the Company shall pay Executive an amount consistent with this Section 1(n)(ii)

(iii)The determinations with respect to this Section 1(n) shall be made by an independent auditor (the “Auditor”) compensated by the Company. The Auditor shall be the Company’s regular independent auditor, unless the regular independent auditor is unable or unwilling to makes such

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Exhibit 10.5

determinations, in which event the Auditor shall be a nationally-recognized United States public accounting firm chosen by the Company and approved by Executive (which approval shall not be unreasonably withheld or delayed).

Section 2. Position

(a)Position. During Executive’s employment, Executive shall serve as Chief Executive Officer and Chairman of the Company. In this position, Executive shall report directly to the Board.

(b)Best Efforts. During Executive’s employment, Executive shall: (1) faithfully and efficiently perform Executive’s duties hereunder, comply with the Company’s policies, procedures, bylaws, rules, code of conduct and practices, as the same may be amended from time to time, and obey all reasonable and lawful directions given by or under the authority of the Board; (2) satisfy all relevant requirements, recommendations, rules and regulations as amended from time to time of any regulatory body whose consent is required to enable Executive to undertake (or continue to undertake) Executive’s duties hereunder and all other regulatory authorities relevant to the Company; (3) refrain from engaging in any other business, profession or occupation for compensation or otherwise which would conflict, directly or indirectly, with the rendition of services to the Company, without the prior written consent of the Board (except that Executive may engage in charitable and community activities and manage Executive’s personal investments, provided that such activities do not materially interfere with the performance of Executive’s duties hereunder or conflict with the conditions of Executive’s employment); (4) refrain from engaging in any conduct prejudicial to the interests and reputation of the Company but instead endeavor to promote and extend the business of the Company and protect and further its interests and reputation; and (5) other than in the proper performance of Executive’s duties hereunder, refrain from introducing to any other Person business of a kind in which the Company is for the time being engaged or capable of becoming engaged or with which the Company is able to deal in the course of its business.

(c)Personal Performance. Executive’s performance and discharge of Executive’s duties and responsibilities hereunder shall be the subject of regular review, the object of which is to assess

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Exhibit 10.5

performance during the period under review and to set agreed performance standards for future review periods.

(d)Directorships. Executivemay be required, at the sole discretion of the Company, to perform services for any subsidiary or Affiliate of the Company and may be required to undertake the role and duties of an officer or non-executive director of other companies that are subsidiaries or Affiliates of the Company. No additional compensation will be paid in respect of these appointments and Executive shall, at the request of the Company, immediately resign from any such office without claim for compensation.

(e)Location. During the period of Executive’s employment, Executive shall be based in Stamford, Connecticut but may be relocated within a fifty (50) mile radius of the same location at the Company’s sole discretion. Additionally, Executive may be required to travel elsewhere in the world in the performance of Executive’s duties.

(f)Stock Ownership and Retention Requirements. Executive will be subject to the Company’s stock ownership and retention guidelines applicable to the Chief Executive Officer of the Company as adopted by the Compensation and Human Resources Committee of the Board (the “CHRC”), and as may be amended from time to time in the discretion of the CHRC.

Section 3. Compensation.

(a)Base Salary. The Companyshall pay Executive a base salary (the “Base Salary”) at the initial annual rate of $1,487,000, in substantially equal installments as it is earned not less frequently than monthly in accordance with the Company’s usual payroll practices. Executive shall be entitled to such increases in Executive’s Base Salary as may be determined from time to time at the sole discretion of the CHRC.

(b)Total Compensation Opportunity. Exclusive of the one-time equity grant discussed in Section 3(d) below, Executive’s annual target total compensation shall be $7,500,000. Executive’s total

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Exhibit 10.5

compensation opportunity may be subject to such increases as may be determined from time to time at the sole discretion of the CHRC.

(c)Variable Compensation. Subject to regulatory requirements which may arise from time-to-time, Executive’s annual target variable compensation shall be $6,013,000. The amount, form and timing of payment and grant will be determined by CHRC in its sole discretion on an annual basis. The CHRC may consider a number of factors in making its variable compensation award decision, including personal, team, business, and Company targets and external economic considerations. Variable compensation may be paid in cash, deferred cash or equity-based awards (including awards with performance conditions) or any other form, as determined by the CHRC in its sole discretion on an annual basis.

(d)Equity Grant. Executive shall be awarded a one-time equity-based award with a grant date value of $3,000,000. The equity-based award shall be comprised 50% of restricted stock units that will be eligible to vest in May 2019 and 50% of performance share units that will be eligible to vest in May 2019, with the actual amount earned to be determined based subject to performance. The terms and conditions of these equity awards will be memorialized in award agreements approved by the CHRC, which will include a condition that Executive must be employed by the Company in good standing on the equity award vesting date in order for vesting to occur. For the avoidance of doubt, the termination provisions set forth in Section 1 shall not apply to this equity award.

Section 4. Other Employee Benefits, Vacation and Perquisites.

(a)Employee Benefits. Executive may participate in and receive Employee Benefits available to the Company’s senior executives. Copies of all pertinent plan, program or policy documents will be provided to Executive on request, to the extent the same are within the Company’s control. All benefits and the plans, programs, policies, or practices relating to them may be changed at any time by the Company within its sole discretion.

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Exhibit 10.5

(b)Paid Time Off. In addition to any applicable statutory holidays, Executive shall be entitled to accrue twenty seven (27) days of paid time off (“PTO”) annually, which may be scheduled as time off away from work in accordance with the Company’s PTO policy in effect from time to time.

(c)Car and Driver. Executive shall be entitled to business use of a Company car and driver.

(d)Reimbursement of Business Expenses. Reasonable, customary and necessary travel, entertainment and other business expenses incurred by Executive in the performance of Executive’s duties hereunder shall be reimbursed by the Company in accordance with the Company’s policies then in effect, subject to such reasonable substantiation and documentation as may be required by the Company from time to time.

(e)Sickness. Executive will be eligible for all payments in respect of short- and long-term disability generally made available from time to time to other executives of the Company. Unless required under applicable federal or state law, Executive does not have any contractual or other right to payment in respect of any period of absence due to sickness or incapacity and any such payments will be made at the Company’s sole discretion. Executive shall at any time (including during any period of incapacity), at the request and expense of the Company, submit to medical examinations by a medical practitioner nominated by the Company, to the extent permitted by applicable federal and state law. Executive agrees, and hereby authorizes, that the results of any such medical examination be disclosed to the Company, subject to the provisions of the United States Health Insurance Portability and Accountability Act of 1996.

(f)Financial Planning Services. Executive shall be entitled to elect to receive financial planning services which may be offered by the Company to other senior executives.

Section 5. Personal Securities Transactions Policy and Minimum Requirements.

Executive is subject to the Company’s Personal Securities Transactions Policy and related Minimum Requirements, which dictates the procedures relating to transactions in Company securities.

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Exhibit 10.5

Section 6. Non-Competition, Non-Solicitation.

(a)Non-Competition. Executive acknowledges and recognizes the highly competitive nature of the businesses of the Company. Accordingly, Executive agrees that during the Employment Term and Non-Competition Restricted Period, neither Executive nor any person or enterprise controlled by Executive will hold any position as employee, director, officer, consultant, partner, agent or principal in or with any of the following: JP Morgan Chase, Bank of America, Citigroup, Wells Fargo, US Bancorp, Regions Financial Corp., M&T Bank Corp., PNC, Fifth Third, Sun Trust, Comerica, KeyCorp, BB&T, Capital One, or TD Bank. If Executive wishes to take up a position with any of the entities on the list, he should notify the Board of that wish and the Board will consider in good faith whether to release him from the restrictions in this Section 6(a) to the extent permitted to allow him to take up such position (and the Board will not unreasonably decline to provide such release). Such release, if granted, will release Executive from the obligations under Sections 1(c)(ii)(B) and1(g) related to Non-Competition under this Section 6(a). Notwithstanding the foregoing, nothing in this Section 6(a) shall prohibit Executive’s ownership of less than two percent (2%) of the outstanding shares of the stock or other equity of any company engaged in any business, which shares or other equity are regularly traded on a national securities exchange or in any over-the-counter market or the provision of services to a subsidiary, division or affiliate of a competitive business if such subsidiary, division or affiliate is not itself engaged in a competitive business and Executive does not provide services to, or have any responsibilities regarding, the competitive business.

(b)Non-Solicitation of Employees. Executive agrees that during the Employment Term and Non-Solicitation Restricted Period, Executive shall not, directly or indirectly, whether for Executive’s own account or for any other person or entity hire, employ, solicit for employment or hire, or attempt to solicit for employment or hire any Covered Employee. Executive further agrees not to otherwise interfere with the relationship between any Covered Employee and the Company. Notwithstanding anything herein to the contrary, the Company agrees that Executive shall not be deemed in violation of this Section 6(b) if an entity with which Executive is associated hires or engages any employee of the Company or any of its

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Exhibit 10.5

subsidiaries, if Executive was not, directly or indirectly, involved in hiring or identifying such person as a potential recruit or assisting in the recruitment of such employee.

(c)Non-Solicitation of Customers and Prospective Clients. Executive agrees that during the Employment Term and Non-Solicitation Restricted Period, Executive shall not, directly or indirectly, whether for Executive’s own account or for any other person or entity, through any corporation, partnership or other business entity of any kind, solicit, assist in soliciting for business or entice away or in any manner attempt to persuade any client or customer or prospective client or customer to discontinue or diminish his, her or its relationship or prospective relationship with the Company, or otherwise provide business to any person, corporation, partnership or other business entity of any kind other than the Company; provided, however, that general solicitation through advertisement shall not constitute solicitation for purposes of this provision. The restrictions in this Section 6(c) shall apply only to: (1) clients, customers or prospective clients or customers introduced to Executive by the Company; or (2) any customer of the Company (whether previously known to Executive or introduced to Executive through the Company) with whom Executive had contact during Executive’s employment by the Company (including any Notice Period); or (3) any customer or client of the Company whose identity as a client or potential client became known to Executive as a result of Executive’s employment with the Company.

(d)Representations. Executive agrees that all of the foregoing restrictions are reasonable and necessary to protect the Company’s business and its Confidential Information and that Executive’s employment by the Company, along with the benefits and attributes of that employment, is good and valuable consideration to compensate Executive for agreeing to all restrictions contained in this Agreement. Executive also acknowledges, represents and warrants that Executive’s knowledge, skills and abilities are sufficient to permit Executive to earn a satisfactory livelihood without violating these provisions. Further, Executive agrees that Executive shall not, following the termination of Executive’s employment with the Company, represent or hold Executive out as being in any way connected with the Company.

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Exhibit 10.5

(e)Blue Pencil. It is expressly understood and agreed that although Executive and the Company consider the restrictions contained in this Section 6 and in Section 7 to be reasonable, if a final judicial determination is made by an arbitrator or a court of competent jurisdiction that the time or territory or any other restriction contained in this Agreement is an unenforceable restriction against Executive, the provisions of this Agreement shall not be rendered void but shall be deemed amended to apply as to such maximum time and territory and to such maximum extent as such court may judicially determine or indicate to be enforceable. Alternatively, if an arbitrator or a court of competent jurisdiction finds that any restriction contained in this Agreement is unenforceable, and such restriction cannot be amended so as to make it enforceable, such finding shall not affect the enforceability of any of the other restrictions contained herein.

Section 7. Confidentiality; Ownership of Materials; Duty to Return Company Property.

(a)Confidential Information. Other than in the proper performance of Executive’s duties hereunder, Executive will not, either during Executive’s employment or at any time afterwards, whether on Executive’s own behalf or in any capacity or on behalf of any other person, firm, company or organization, disclose or allow to be disclosed to any person or organization or use for Executive’s own benefit or for the benefit of any third party, any Confidential Information. Executive will use Executive’s best endeavors to prevent the disclosure of any Confidential Information and will inform the Company immediately of any instances of disclosure of which Executive becomes aware. For the avoidance of doubt, ‘disclosure’ includes (but is not limited to) disclosure on the internet or through similar means or media including any social media. In relation to Price-Sensitive Information, Executive will also ensure that any disclosure, if required in the proper performance of Executive’s duties, is made in a manner that is compliant with applicable laws and regulations and Company procedures relating to the disclosure of such information. Any breach by Executive of the provisions of this Section 7 will be regarded by the Company as a serious matter and may, if committed while Executive is employed by the Company, result in the immediate termination of Executive’s employment for Cause. Executive agrees that the undertakings comprised in

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Exhibit 10.5

this Section 7 are reasonable and necessary to protect the legitimate business interests of the Company both during and after the termination of Executive’s employment.

(b)No Copies. Executive is not permitted to make any copy, abstract, summary or précis of the whole or any part of any document belonging to the Company unless Executive has been authorized to do so by the Company, and shall not at any time use or permit to be used any such items otherwise than for the benefit of the Company in the performance of Executive’s services hereunder.

(c)Exclusions. The obligations in this Section 7 shall not apply: (1) to information or knowledge which is already in the public domain, other than by way of unauthorized use or disclosure (whether by Executive or a third party); (2) where Executive’s use or disclosure of the information has been properly authorized by the Company; (3) to any information which Executive discloses in accordance with applicable public interest disclosure legislation; or (4) to any disclosure required by law or by any court, arbitrator, mediator or administrative or legislative body (including any committee thereof) with jurisdiction to order Executive to disclose or make accessible any information; or (5) any litigation, arbitration or mediation involving this Agreement, including, but not limited to, the enforcement of this Agreement. Notwithstanding the foregoing or any other provision in this Agreement or otherwise, nothing herein shall prohibit Executive from reporting possible violations of federal or state law or regulation to any governmental agency or entity or self-regulatory organization including but not limited to the Department of Justice, the Securities and Exchange Commission, Congress, and any agency Inspector General, or making other disclosures that are protected under the whistleblower provisions of federal or state law or regulation (it being understood that Executive does not need the Company’s prior authorization to make any such reports or disclosures and Executive not required to notify the Company that he has made such reports or disclosures).

(d)Duty to Return Confidential Information and Other Company Property. All reports, files, notes, memoranda, e-mails, accounts, documents or other material (including all notes and memoranda of any Confidential Information and any copies made or received by Executive in the course of Executive’s employment (whether during or after) are and shall remain the sole property of the Company

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Exhibit 10.5

and, following termination of Executive’s employment or at any other time upon the Company’s request, to the extent within Executive’s possession or control, shall be surrendered by Executive to the duly authorized representative of the Company. Executive agrees that upon termination of Executive’s employment with the Company for any reason, or at any other time upon the Company’s request, Executive will return to the Company immediately all memoranda, books, papers, plans, information, letters and other data, all copies thereof or therefrom, in any way relating to the business of the Company, all other property of the Company (including, but not limited to, company car (together with the keys and all documents relating to it), credit cards, equipment, correspondence, data, disks, tapes, records, specifications, software, models, notes, reports and other documents together with any extracts or summaries, removable drives or other computer equipment, keys and security passes) in Executive’s possession or under Executive’s control and Executive further agrees that Executive will not retain or use for Executive’s own account at any time any trade names, trademark or other proprietary business designation used or owned in connection with the business of the Company. Notwithstanding anything to the contrary in this Section 7(d), Executive shall be entitled to retain: (1) papers and other materials of a personal nature, including, but not limited to, photographs, correspondence, personal diaries, calendars and rolodexes, files containing personal materials and phone books, all exclusive of client contact and other business information; (2) copies of information showing Executive’s compensation or relating to reimbursement of expenses; (3) copies of information that Executive reasonably believes may be needed for tax purposes; and (4) copies of plans, programs and agreements relating to Executive’s employment, or termination thereof, with the Company.

(e)Reasonableness. Executive agrees that the undertakings set forth in this Section 7 and in Section 8 are reasonable and necessary to protect the legitimate business interests of the Company during, and after the termination of, Executive’s employment, and that the benefits Executive receives under this Agreement are sufficient compensation for these restrictions.

Section 8. Intellectual Property.

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Exhibit 10.5

(a)Executive agrees that all Intellectual Property that Executive develops or produces in connection with Executive’s employment duties, or which Executive derives from any material produced by Executive or any other employee of the Company in connection with their employment duties, will be owned by the Company absolutely and Executive hereby assigns all rights to such Intellectual Property to the Company in all countries. Executive agrees, at the Company’s expense, to sign all documents and carry out all such acts as will be necessary to identify and preserve the legal protection of all Intellectual Property; however, the Company will have no obligation to compensate Executive for time spent in connection with any assistance provided unless otherwise required by law. Notwithstanding the foregoing, Executive understands that no provision in this Agreement is intended to require assignment of any of Executive’s rights in an invention for which Executive can prove no equipment, supplies, facilities or Confidential Information or trade secret information of the Company was used, which invention was developed entirely on Executive’s own time, and which invention Executive can prove: (1) does not relate to the business of the Company or the actual or demonstrably anticipated research or development of the Company; and (2) does not result from any work performed by Executive for the Company.  To the extent compatible with applicable state law, these provisions do not apply to any invention which is required to be assigned by the Company to the United States Government.  Executive waives all moral rights in all Intellectual Property which is owned by the Company, or will be owned by the Company, pursuant to this Section 8.

(b)Executive agrees to promptly submit to the Company written disclosures of all inventions, whether or not patentable, which are made, conceived or authored by Executive, alone or jointly with others, while Executive is employed by the Company.

Section 9. Certain Agreements.

(a)Data Protection. Executive shall ensure Executive is familiar with and abides by the Company’s Data Management Policy, procedures and accountabilities. Executive acknowledges that any breach of these procedures may result in the immediate termination of Executive’s employment.

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Exhibit 10.5

(b)Personal Information. Executive acknowledges and agrees that the Company is permitted to hold personal information about Executive as part of its personnel and other business records and, in accordance with applicable law, may use such information in the course of the Company’s business.

(c)Credit Data. The Company reserves the right, upon five (5) days’ prior written notice, to, and Executive agrees that the Company may, in accordance with applicable law, carry out searches about Executive through credit reference agencies or through the Company’s customer records at any time during Executive’s employment for purposes of identifying any serious debt or other significant financial difficulties of Executive for the purposes of detecting, eliminating or mitigating any particular risk of employee fraud or theft. The Company will only retain the information about Executive which the Company obtains from these searches in accordance with applicable law and for so long as is needed for the purposes set out above (subject to any legal (including any regulatory) obligation which requires the Company to retain that information for a longer period). The credit reference agency will record details of the search but these will not be available for use by lenders to assess the ability of Executive to obtain credit. Executive has the right of access to Executive’s personal records held by credit reference agencies. The Company will supply the names and addresses of such agencies upon request, to help Executive to exercise Executive’s right of access to such records.

(d)Indebtedness. For the reasons referred to above, the Company expects Executive to manage Executive’s personal finances responsibly. The Company requires that Executive draw to the attention of the Board any serious debt or significant financial difficulties that Executive may have, including those which result in court action being taken against Executive.

Section 10. Remedies.

The Company and Executive agree that it is impossible to measure solely in money the damages which will accrue to the Company by reason of Executive’s failure to observe any of Executive’s obligations under Sections 6, 7 or 8 of this Agreement. Therefore, if the Company shall institute any

23

Exhibit 10.5

action or proceeding to enforce such provisions, Executive hereby waives the claim or defense that there is an adequate remedy at law and agrees in any such action or proceeding not to interpose the claim or defense that such remedy exists at law. Without limiting any other remedies that may be available to the Company, Executive hereby specifically affirms the appropriateness of injunctive or other equitable relief in any such action and acknowledges that nothing contained within this Agreement shall preclude the Company from seeking or receiving any other relief including, without limitation, any form of injunctive or equitable relief. Executive also agrees that, should Executive violate the provisions of Section 6 and its subsections such that the Company is forced to undertake any efforts to defend, confirm or declare the validity of the covenants contained within Section6 of this Agreement, the time restrictions set forth therein shall be extended for a period of time equal to the pendency of any court proceedings, including appeals.

Section 11. Dispute Resolution; Mediation and Arbitration.

Except as permitted in Section 10 or as provided in the last sentence of this Section 11, to the fullest extent permitted by law, the Company and Executive agree to waive their rights to seek remedies in court, including but not limited to rights to a trial by jury. The Company and Executive agree that any dispute between or among them or their Subsidiaries, Affiliates or related entities arising out of, relating to or in connection with this Agreement or Executive’s employment with the Company, including but not limited to claims for discrimination or other alleged violations of any federal, state or local employment and labor law statutes, ordinances or regulations, will be resolved in accordance with a confidential two-step dispute resolution procedure involving: (1) Step One: non-binding mediation, and (2) Step Two: binding arbitration under the Federal Arbitration Act, 9 U.S.C. § 1, et. seq., or state law, whichever is applicable. Any such mediation or arbitration hereunder shall be under the auspices of the American Arbitration Association (“AAA”) pursuant to its then current Commercial Arbitration Rules and Mediation Procedures (the “AAA Commercial Rules”). Disputes encompassed by this Section 11 include claims for discrimination arising under local, state or federal statutes or ordinances and claims arising under any state’s labor laws. Notwithstanding anything to the contrary in the AAA Commercial Rules, the mediation

24

Exhibit 10.5

process (Step One) may be ended by either party to the dispute upon notice to the other party that it desires to terminate the mediation and proceed to the Step Two arbitration; provided, however, that neither party may so terminate the mediation process prior to the occurrence of at least one (1) mediation session with the mediator. No arbitration shall be initiated or take place with respect to a given dispute if the parties have successfully achieved a mutually agreed to resolution of the dispute as a result of the Step One mediation. The mediation session(s) and, if necessary, the arbitration hearing, shall be held in New York, New York. The arbitration (if the dispute is not resolved by mediation) will be conducted by a single AAA arbitrator, mutually selected by the parties, as provided for by the AAA Commercial Rules. The Company will be responsible for the AAA charges, including the costs of the mediator and arbitrator. The Company and Executive agree that the arbitrator shall apply the substantive law of the State of New York to all state law claims and federal law to any federal law claims, that discovery shall be conducted in accordance with the AAA Commercial Rules or as otherwise permitted by law as determined by the arbitrator. In accordance with the AAA Commercial Rules (a copy of which is available through AAA’s website, www.adr.org), the arbitrator’s award shall consist of a written statement as to the disposition of each claim and the relief, if any, awarded on each claim. The Company and Executive understand that the right to appeal or to seek modification of any ruling or award by the arbitrator is limited under state and federal law. Any award rendered by the arbitrator will be final and binding, and judgment may be entered on it in any court of competent jurisdiction. Nothing contained herein shall restrict either party from seeking temporary injunctive relief in a court of law to the extent set forth in Section 11 hereof. In the unlikely event the AAA refuses to accept jurisdiction over a dispute, Executive and the Company agree to submit to Judicial-Arbitration-Mediation Services (“JAMS”) mediation and arbitration applying the JAMS equivalent of the AAA Commercial Rules. If AAA and JAMS refuse to accept jurisdiction, the parties may litigate in a court of competent jurisdiction.

Section 12. Miscellaneous.

(a)Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard for the conflict of laws provisions thereof.

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Exhibit 10.5

(b)Entire Agreement and Amendments; Survivorship; Strict Construction. This Agreement contains the entire understanding and agreement of the parties with respect to the subject matter hereof, and as of the Effective Date, this Agreement shall supersede in its entirety the Prior Agreement, which shall be of no force or effect. There are no restrictions, agreements, promises, warranties, covenants or undertakings between the parties with respect to the subject matter herein other than those expressly set forth herein. This Agreement may not be altered, modified, or amended except by written instrument signed by the parties hereto, which attaches a copy of this Agreement. The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement to the extent necessary to the intended preservation of such rights and obligations.

(c)No Waiver. The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver of such party’s rights or deprive such party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

(d)Severability. In the event that any one or more of the provisions of this Agreement shall be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions of this Agreement shall not be affected thereby.

(e)Assignment. This Agreement shall not be assignable by Executive. This Agreement shall be freely assignable by the Company without restriction.

(f)Successors; Binding Agreement. This Agreement shall inure to the benefit of and be binding upon the parties’ personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees, legatees and permitted assigns.

(g)Notice. For the purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or three (3) business days after mailing registered mail, return receipt requested, postage prepaid or by recognized courier. All notices to the Company shall be directed to the attention of Neil Rosolinsky, Deputy General Counsel, Litigation & Employment, Citizens Bank, 30 Montgomery Street,

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Exhibit 10.5

13^th floor, Jersey City, NJ 07302 and all notices to Executive shall be sent to the last address for Executive in the Company’s records, or to such other address as either party may have furnished to the other in writing, except that notice of change of address shall be effective only upon receipt.

(h)Withholding Taxes; Deductions. The Company may withhold from any amounts payable under this Agreement such federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation. Executive agrees that the Company may, at any time during Executive’s employment, or in any event upon its termination, deduct from Executive’s remuneration, any monies due by Executive to the Company for any overpayment made and/or outstanding loans, advances, relocation expenses and/or salary paid in respect of excess PTO that was taken but not earned, unless otherwise prohibited by law, including, without limitation, Section 409A.

(i)Counterparts; Effectiveness. This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by the other party hereto, including by fax or electronic pdf.

Section 13. Defined Terms.

“Affiliate” has the meaning accorded such term under Rule 12b-2 of the Securities Exchange Act of 1934, as in effect on the Effective Date.

“Board” means the board of directors of Citizens Financial Group, Inc. (including any duly authorized committee of the Board).

“Cause” includes the following conduct by, or situation involving, Executive: (i) any indictment for, conviction of, plea of guilty or nolo contendere to by Executive for the commission of: (a) any felony, (b) any criminal offense within the scope of Section 19 of the Federal Deposit Insurance Act, 12 U.S. C. § 1829; or (c) a misdemeanor involving dishonesty ; (ii) if Executive willfully commits a material breach of his obligations under this Agreement or repeats or continues after written warning any material breach of

27

Exhibit 10.5

his obligations hereunder, or is, in the opinion of the Board, guilty of gross misconduct which brings him or the Company or any of its Affiliates into disrepute; (iii) if Executive is guilty of dishonesty in the conduct of his duties hereunder, gross incompetence, willful neglect of duty, or of mismanagement of his financial affairs through failure to observe the company’s rules and procedures for the operation of bank accounts and/or borrowing; (iv) if Executive commits any act of bankruptcy or takes advantage of any statute for the time being in force offering relief to insolvent debtors; or (v) if, as a result of any default on the part of Executive, he is prohibited by law from acting as an officer of the Company or any of its Affiliates.

“Change of Control” means the occurrence of any one or more of the following events:

(a)    any person, other than an employee benefit plan or trust maintained by the Company, becomes the Beneficial Owner (as defined in Rule 13d-3 under the Exchange Act of 1934, as amended), directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the combined voting power of the Company’s outstanding securities entitled to vote generally in the election of directors;

(b)    at any time during a period of twelve (12) consecutive months, individuals who at the beginning of such period constituted the Board and any new member of the Board whose election or nomination for election was approved by a vote of at least a majority of the directors then still in office who either were directors at the beginning of such period or whose election or nomination for election was so approved, cease for any reason to constitute a majority of members of the Board; or

(c)    the consummation of (A) a merger or consolidation of the Company with any other corporation or entity, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or being converted into voting securities of the surviving entity or, if applicable, the ultimate parent thereof) at least fifty percent (50%) of the combined voting power and total fair market value of the securities of the Company or such surviving entity or parent outstanding immediately after such merger or consolidation, or (B) any sale, lease, exchange or other transfer to any person of assets

28

Exhibit 10.5

of the Company, in one transaction or a series of related transactions, having an aggregate fair market value of more than fifty percent (50%) of the fair market value of the Company and its subsidiaries (the “Company Value”) immediately prior to such transaction(s), but only to the extent that, in connection with such transaction(s) or within a reasonable period thereafter, the Company’s shareholders receive distributions of cash and/or assets having a fair market value that is greater than fifty percent (50%) of the Company Value immediately prior to such transaction(s).

Notwithstanding the foregoing, for any award that provides for accelerated distribution on a Change of Control of amounts that constitute “deferred compensation” (as defined in Section 409A), if the event that constitutes such Change of Control does not also constitute a change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the Company’s assets (in either case, as defined in Section 409A), such amount shall not be distributed on such Change of Control but instead shall vest as of the date of such Change of Control and shall be paid on the scheduled payment date specified in the applicable award agreement, except to the extent that earlier distribution would not violate Section 409A.

“Confidential Information” means knowledge about the commercial affairs and business transactions of the Company including, but not limited to, information about customers, clients, employees or suppliers (whether former, actual or potential), Company contracts, pricing structures, financial and marketing details, terms of business, proposed transactions, business plans, premises, assets, internal communications, intellectual property, technical systems and data, designs, formulae, product lines, projects, operational procedures, research activities, negotiating positions, forward planning, technical and product developments, accounts, finances, computer software and general know-how of the Company. Confidential Information also includes, without limitation: (1) Price-Sensitive Information; (2) any information contained in documents marked “confidential” or documents of a higher security classification and other information that, because of its nature or the circumstances in which Executive receives it, Executive should reasonably consider to be confidential; and (3) confidential information (howsoever obtained) about or provided by any third party received during the course of

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Exhibit 10.5

Executive’s employment. The Company reserves the right to modify the categories of Confidential Information from time to time.

“Covered Employee” means any person who was employed by the Company at any time within twelve (12) months prior to the time of the act of solicitation (and who, in the case of the Non-Solicitation Restricted Period following the termination of Executive’s employment, was also employed by the Company or any of its subsidiaries or Affiliates on the date the Non-Solicitation Restricted Period begins).

“Disability” means Executive’s physical or mental incapacitation such that Executive is unable for a period of six (6) months or for an aggregate of six (6) months in any twenty-four (24) consecutive month period to perform Executive’s duties hereunder.

“Employee Benefits” means any benefits under any and all executive welfare and health benefit plans (including but not limited to healthcare (medical, vision and dental), life insurance, and short-term and long-term disability plans) and other executive benefit plans (including but not limited to qualified pension plans, retirement savings and 401(k)), if any, that are offered to other executives of the Company, to the extent Executive is eligible thereunder and in accordance with all other terms and conditions of such plans, policies, programs and practices.

“Employment Term” means the period during which Executive was employed by RBS and the Company under the Prior Agreement together with the period during which Executive is employed by the Company under this Agreement.

“Good Reason” means a material breach of this Agreement by the Company, or a substantial diminution or other substantial adverse change, not consented to by Executive, in the nature or scope of Executive’s responsibilities, authorities, powers, functions or duties or in Executive’s Base Salary, save that removal of the role of Chairman of the Company from Executive’s remit shall not amount to Good Reason (although for the avoidance of doubt the Company has not determined this matter and any such decision will be taken with consideration of any such factors as the Board believes relevant).

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Exhibit 10.5

“Intellectual Property” means patents, rights to inventions, trade marks, service marks, registered designs (including applications for and rights to apply for any of them), unregistered design rights, trade or business names, domain names, rights in get-up, rights in goodwill or to sue for passing off, unfair competition rights, copyright and related rights, rights in computer software, database rights, topography rights, rights in Confidential Information (including know-how and trade secrets) and any similar rights in any country.

“Non-Competition Restricted Period” means the six (6) month period following the date that Executive ceases employment with the Company by reason of a termination by the Company without Cause or a resignation by Executive for Good Reason (whether or not a Change of Control Related Termination), less any time spent on Garden Leave and/or any Notice Period worked; provided, however, the Non-Competition Restricted Period may be extended as provided in Section 1.

“Non-Solicitation Restricted Period” means the twelve (12) month period following the date that Executive ceases employment with the Company by reason of a termination by the Company without Cause or a resignation by Executive for Good Reason (whether or not a Change of Control Related Termination), less any time spent on Garden Leave and/or any Notice Period worked; provided, however, the Non-Solicitation Restricted Period may be extended as provided in Section 1.

“Notice Period” means the period of time specified for prior written Notice of Termination.

“Notice of Termination” means a written notice indicating the specific termination provision in this Agreement relied upon and setting forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of employment under the provision so indicated, to the extent applicable.

“Person” means any individual, corporation, partnership, trust or any other entity or organization.

“Price-Sensitive Information” means information relating directly or indirectly to particular securities or issuers of such securities (including members of the Company and third parties) which

31

Exhibit 10.5

would, if generally available, be likely to have an effect on the price of such securities or related investments.

“RBS” means The Royal Bank of Scotland plc.

“Retirement” means Executive’s age plus years of service (in each case, including completed months) equals or exceeds 65, with a minimum of at least five years of service with the Company, which Executive has achieved as of the Effective Date.

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Exhibit 10.5

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.

BRUCE VAN SAUN
/s/ Bruce Van Saun
	CITIZENS FINANCIAL GROUP, INC.
	By:	/s/ Stephen T. Gannon
		Name: Stephen T. Gannon
		Title: General Counsel and Chief Legal Officer

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Exhibit 10.5

Exhibit A

Agreed form of Release

Dear Mr. Van Saun:

This letter confirms that on [Date] you received this Separation and General Release Agreement (the “Agreement”). You have up to [21/45]¹ days after your receipt of the Agreement to consider whether to sign and date the Agreement.

This Agreement sets forth our agreement with respect to the terms and conditions of your separation from Citizens Financial Group, Inc. (the “Company”) and your release of any claims you may have, or have had against the Company and its present, former and future parents, subsidiaries, affiliates, divisions, branches and other offices and their respective successors, assigns, officers, agents, representatives, attorneys, fiduciaries, administrators, directors, stockholders and employees (collectively the “Bank”), relating to your employment with, or separation of employment from, the Company.

1.Termination Date. Your termination of employment shall be effective [Date] (“Termination Date”).

2.Separation Benefits. In consideration for timely signing this Agreement and for your complying with the terms herein, the Company agrees to [pay you a lump-sum payment of $[Amount] in accordance with Section [INSERT APPROPRIATE SECTION REFERENCE] of the Executive Employment Agreement between you and the Company dated [Date], 2016 (the “Employment Agreement”). In addition, your cash and equity-based awards will be treated as specified in the Employment Agreement. Collectively, these payments and benefits shall be referred to as your “Separation Benefits.”

Please be advised that your right to accrue a base salary, vacation pay, to receive short and long-term disability, to participate in the 401(k) plan, to participate in or remain eligible for any bonus or incentive award, or to participate in other benefits not specified above shall cease on your Termination Date.

¹ Note: Consolidation period to be determined at time of termination.

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Exhibit 10.5

The Company will deduct from the above payments all amounts required by applicable federal, state, and local law, and you are responsible for any and all tax liabilities which may be imposed upon you as a result of your receipt and acceptance of the Separation Benefits.

3.Benefits. The following benefits are available to you irrespective of whether you execute this Agreement.

a.Health Benefits and COBRA. You will continue your participation in the applicable medical, dental and vision coverage until midnight on the last day of the month in which your Termination Date falls. Participation in the Health Care Reimbursement Account ends as of your Termination Date. However, irrespective of whether you execute this Agreement, you may extend all of these benefits for up to an additional 18 months under COBRA, subject to the provisions of the American Recovery and Reinvestment Act of 2009. You will pay the full cost of coverage, plus a 2% administrative fee. Health Care Reimbursement Account participation is available on an after-tax basis only. (In some cases, COBRA coverage may be extended beyond 18 months. Please refer to the COBRA materials you will receive under separate cover for details).

Please be advised that if you extend coverage for at least one month, the first full calendar month after your exit date will continue at active employee rates and will not count towards the 18 months of COBRA. Please note that you can extend only the medical, dental, vision and Health Care Reimbursement Account coverage options you have in place at your exit date.

You will receive additional information about continuing your medical, dental and vision coverage, and continued Health Care Reimbursement Account participation in connection with COBRA under separate cover. If you do not receive COBRA information, please call the HR Service Center at 1.866.472.8234.

b.401(k) Participation. Whether or not you sign this Agreement, the Company will provide you with a 401(k) matching contribution pursuant to the matching terms set forth in the

2

Exhibit 10.5

Company’s 401(k) plan. Based on the rules of the Plan as indicated in the Plan Document you will be eligible for a true-up if you meet the requirements of a true-up.

c.Outplacement.     Whether or not you sign this Agreement,the Companywill provide you with professional outplacement benefits. This offer of outplacement benefits will remain open for a period of 180 days after your Termination Date.

4.Review Period. You have up to [21/45] days after receipt of this Agreement to consider whether to sign and return this Agreement. You understand that by entering into this Agreement and by accepting the Separation Benefits, you and the Company are agreeing to all of the terms and conditions set forth in this Agreement. If you agree to and accept the terms and conditions herein sign, date and return an original of this Agreement to Citizens Financial Group, Inc., attn: [Name], [Address], no later than [21/45] days after your receipt of this Agreement.The offer presented in the Agreement expires at close of business on [Date].

THE COMPANY ADVISES YOU TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTING THIS AGREEMENT AND GENERAL RELEASE. BY SIGNING THIS AGREEMENT AND GENERAL RELEASE YOU GIVE UP AND WAIVE IMPORTANT LEGAL RIGHTS.

5.No consideration absent execution of this Agreement and General Release. You understand and agree that you would not receive the Separation Benefits except for your execution of this Agreement and the fulfillment of the promises contained herein.

6.General Release. In consideration of the Company entering into this Agreement and providing you with the Separation Benefits, to which you would not otherwise be entitled, you agree that you and your heirs, executors, administrators and assigns hereby voluntarily, knowingly and willingly release the Bank from any and all claims that you now have or have had, including any and all claims which may have been brought by third-parties on your behalf, against the Bank arising out of your employment with the Company and/or the termination of that employment. Without limiting the generality of the foregoing, this Agreement is intended to and shall release the Bank from any and all claims,

3

Exhibit 10.5

whether known or unknown, which you ever had, now have or may have against the Bank arising out of your employment and/or your separation from that employment, including but not limited to: (i) any claim under Title VII of the Civil Rights Act of 1964 (“Title VII”), the Americans With Disabilities Act (“ADA”), the Americans with Disabilities Act Amendments Act of 2008 (“ADAAA”), the Employee Retirement Income Security Act of 1974 (“ERISA”), the Civil Rights Act of 1991, Title II of the Genetic Information Nondiscrimination Act of 2008 (“GINA”), the Pregnancy Discrimination Act, the retaliation provisions of the Fair Labor Standards Act (“FLSA”), the Occupational Safety and Health Act (“OSHA”), the Equal Pay Act of 1963 (“EPA”), the Lilly Ledbetter Fair Pay Act of 2009, the Family and Medical Leave Act of 1993 (“FMLA”), the National Labor Relations Act of 1935 (“NLRA”), Executive Order 11246, Section 503 of the Rehabilitation Act of 1973, the Sarbanes Oxley Act of 2002, the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010, the Uniformed Services Employment and Reemployment Rights Act (“USERRA”), the Fair Credit Reporting Act (“FCRA”), the Federal Insurance Contributions Act (“FICA”), the Immigration Reform and Control Act, the Worker Adjustment and Retraining Notification Act (“WARN”), the Older Workers Benefit Protection Act (“OWBPA”), and all applicable state and local laws, including but not limited to the Connecticut Fair Employment Practices Act, the Connecticut Family and Medical Leave Act, Connecticut Labor Law, Connecticut Wage Payment Laws, the Connecticut Whistleblower Law, Connecticut Worker’s Compensation Law, the New York Labor Law, New York Worker’s Compensation Law, the New York State Human Rights Law, the New York City Human Rights Law, the Illinois Worker Adjustment and Retraining Notification Act, Illinois Labor Law, the Illinois Wage Payment and Collection Act, the Illinois Human Rights Act, the Cook County Human Rights Ordinance, the Chicago Human Rights Ordinance; (ii) any claim for equitable relief or recovery of punitive, compensatory, or other damages or monies, attorneys’ fees, any tort, and all claims for alleged discrimination or retaliation based upon age, race, color, sex, gender identity, sexual orientation, genetic information, marital status, religion, national origin, ancestry, handicap, disability, veteran status or other characteristic protected by law; (iii) any claim under the Company’s pension, welfare, stock, or incentive plans (except for applicable rights to deferred compensation or any other equity-based compensation plan under which you have unvested awards); (iv) any claim sounding in tort or contract (express or implied); (v) any claim for wages, commissions,

4

Exhibit 10.5

bonuses, severance pay, holiday pay, vacation pay, life insurance, health or medical insurance, 401(k) matching, profit sharing contributions, any other payments and/or fringe benefits; and (vi) any claim for attorneys’ fees, costs, disbursements and/or the like.

In addition to the foregoing, in exchange for your receipt of the Separation Benefits, you hereby release and discharge the Bank from any and all claims you may have against the Bank arising under the Age Discrimination Employment Act of 1967, as amended, and the applicable rules and regulations promulgated thereunder (“ADEA”). You acknowledge that you understand that ADEA is a federal statute that prohibits discrimination on the basis of age in employment, benefits and benefit plans.

By virtue of the foregoing, you agree that you have waived any damages and other relief available to you (including, without limitation, monetary damages, equitable relief and reinstatement) with respect to any claim or cause of action released above. Nothing herein, however, shall constitute a waiver of claims arising after you sign this Agreement, claims for enforcement of this Agreement or of claims for accrued, vested benefits under any employee benefit plan of the Bank in accordance with the terms of such plans and applicable law.

7.Additional Agreements. You also agree that:

a.this waiver and release includes waiver and release of all claims, demands, contracts, agreements, obligations, debts, liens, covenants, suits, attorneys’ fees, damages, judgments, causes of action, orders and liabilities by you and your heirs, executors, administrators or assigns against the Bank, whether known or unknown, asserted or unasserted, suspected or unsuspected, which you may have arising out of your employment with the Companyor the termination of that employment, or as a result of any act, debts, accounts, covenants, contracts, agreements or promises which may have occurred or been made by any entity, employee, officer director or other authorized representative of the Bank at any time on or prior to the date of your execution of this Agreement, including claims for injunctive or declaratory relief, reinstatement, compensation for lost wages and benefits, compensatory and punitive damages, and costs of litigation, including attorneys’ fees.

5

Exhibit 10.5

b.you will not convey or otherwise disseminate any false or defamatory statements relating to or concerning the Bank, their officers or employees.

c.neither you nor your attorneys, agents, or representatives will in any manner publish, publicize or otherwise make known to any person the existence of or the terms and conditions of this Agreement except as may be required by law, administrative regulation, court order, subpoena, or for the purpose of enforcing this Agreement.This provision does not prohibit or restrict you (or your attorney) from responding to any inquiry, or providing testimony, about the Agreement or its underlying facts and circumstances by, or before, the Securities and Exchange Commission (SEC), Financial Industry Regulatory Authority (“FINRA”), any other self-regulatory organization, or any other federal or state regulatory authority.

d.you will keep entirely confidential and will not, directly or indirectly, disclose any trade secrets, proprietary information, process or program developed by the Bank, and you will not disclose any such information concerning the Bank or its customers or counterparties, except such information as is already public information or becomes public through no action of your own. For avoidance of doubt, you agree to keep strictly confidential any and all Company trading positions of which you have knowledge. Nothing herein shall prevent you from complying with any valid subpoena, or order of any judicial or regulatory authority, seeking such information provided that you notify the Company within three (3) days of receiving any such legal process. Notification should be sent via overnight courier to [Name] at [Address].

e.any software programs, computer systems, configurations or processes developed by you or by the Bank’s employees under your direction (collectively, “Intellectual Property”) are the sole and exclusive property of the Bank, and you will not assert a claim of ownership or license with respect to such Intellectual Property.

6

Exhibit 10.5

f.following your separation from the Company, that you will cooperate fully and in good faith with the Bank in connection with any defense, prosecution or investigation concerning any actual or potential litigation or administrative proceeding, investigation or review in which you may be

involved as a party, non-party or witness. Your cooperation shall include, but not be limited to, being available to meet with counsel to prepare for discovery or trial, cooperating in discovery, providing truthful affidavits, and otherwise acting as a witness on the Bank’s behalf at reasonably convenient times as may be required or deemed necessary by the Bank, all without the necessity of being subpoenaed. The Company shall, at your request, reimburse you for the reasonable out-of-pocket expenses that you incur in the performance of your obligations under this paragraph.

g.you acknowledge and agree that the Bank shall have no duty or obligation to consider any application by you for re-employment or reinstatement (whether as an employee, consultant, contractor or otherwise). However, in the event that you are re-hired/reinstated, the Bank reserves its right to recoup all or part of your Separation Benefits. Please be advised, in such circumstances, any portion of the Separation Benefits which you do retain shall continue to act as sufficient consideration to support this Agreement.

8.Your Affirmations. In executing this Agreement, you affirm that:

a.you have had a reasonable amount of time to consider signing this Agreement, are able to read and understand this Agreement, and you understand its meaning and effect.

b.you have not filed, caused to be filed, or presently are a party to any charge or claim against the Bank or any employee, officer, director, entity or other sub-part thereof, whether judicial, administrative or otherwise.

c.with the exception of any previously communicated deferred compensation, you have been paid and/or have received all compensation, wages, bonuses, commissions, and/or benefits to which you may be entitled.

7

Exhibit 10.5

d.none of the Bank’s decisions regarding your pay and benefits through the date of your execution of this Agreement was discriminatory based on age, disability, race, color, sex, religion, national origin or any other classification protected by applicable law.

e.you have been granted any leave to which you were entitled under the Family and Medical Leave Act or related state or local leave or disability accommodation laws.

f.you have no known workplace injuries or occupational diseases.

g.you have not divulged any proprietary or confidential information of the Bank, including its trading positions, and will continue to maintain the confidentiality of such information consistent with any of the Bank’s policies and your agreement(s) with any employee, officer, director or entity of the Bank.

h.you will continue to comply with Sections 6, 7, 8 and 10 of the Employment Agreement, which provisions shall remain in full force and effect notwithstanding your separation from employment with the Company.

i.you have no knowledge of any fraudulent activity or any act(s) which would form the basis of a claim of fraudulent or illegal activity by the Company (including any allegations of corporate fraud or securities laws violations) and, further, you have not been retaliated against for reporting any such allegations of wrongdoing by the Bank or its employees, agents, officers or directors.

j.you have not assigned or transferred to any person not a party to this Agreement any claim being released by this Agreement or any part thereof, and you shall defend, indemnify, and hold harmless the Bank from any claim (including the payment of attorneys’ fees and costs actually incurred whether or not litigation is commenced) based on or in connection with or arising out of any such assignment or transfer.

8

Exhibit 10.5

k.you have returned to the Company in good working condition all property of the Bank, including equipment such as blackberries and laptops, documents and customer files, within your possession.

l.you have repaid any and all outstanding balances in association with your corporate credit card as of the date of the execution of this Agreement, and have incurred no additional charges that will be due for payment after your execution of this Agreement.

9.Voluntary Release and Waiver. The release and waiver of claims set forth in the Agreement is an essential and material part of the Agreement. Your release and waiver of rights and claims is voluntary and knowing, without duress or coercion, and you elect to execute this Agreement on this date.

10.Sufficiency of Consideration. You acknowledge and agree that the Separation Benefits offered to you herein provide sufficient consideration to support the agreements, affirmations, releases and waivers that you are making by entering into the Agreement. You further acknowledge and agree that the Separation Benefits are only being provided to you in exchange for the agreements, affirmations, releases and waivers you are making by entering into the Agreement and that the Separation Benefits constitute valuable consideration to which you are not otherwise entitled.

11.Non-admission of wrongdoing. The Parties agree that neither this Agreement nor the furnishing of Separation Benefits for this Agreement shall be deemed or construed at any time for any purpose as an admission by the Company or the Bank of wrongdoing or evidence of any liability or unlawful conduct.

12.Severability. If any portion of the Agreement is determined to be illegal or unenforceable in a legal forum, or by an arbitrator, with competent jurisdiction to so determine, that portion is deemed severable, such that the release and waiver shall remain valid and binding in full force and effect.

9

Exhibit 10.5

13.Governing Law. This Agreement shall be governed by and construed in accordance with New York law without giving effect to the conflict of laws provisions thereof.

14.Arbitration. The parties agree that this Agreement and any disputes relating thereto, including, but not limited to, disputes pertaining to claims of discrimination, shall be arbitrated before a single arbitrator chosen from the employment panel of JAMS Alternative Dispute Resolution (“JAMS”) and subject to the JAMS rules for resolving employment disputes unless another forum or set of rules mutually agreed to by the parties. The decision of the arbitrator(s) in connection with such arbitration shall be final, and judgment upon any award granted pursuant to such arbitration may be entered in any court having jurisdiction.

10

Exhibit 10.5

15.Integration Clause. This Agreement may not be changed orally, and it sets forth the complete agreement between you and the Company pertaining to your separation of employment and provision of the Separation Benefits from the Company.

16.Review Period. You received this Agreement on [Date] and have been given a period of [21/45] days from then to decide whether to sign it. You may sign before the end of the [21/45] day period (though you are under no obligation to do so) and you acknowledge that you are voluntarily and knowingly waiving your right, without duress or coercion, to consider this Agreement during the full Review Period. For avoidance of doubt, the last day for you to sign this Agreement for it to be effective is [Date].

17.Section 409A. The provisions of Section 1(m) of the Employment Agreement shall be incorporated by reference herein as if fully set forth herein.

Please indicate your agreement with the foregoing by signing in the place indicated below. The signed Agreement should be returned to [Name], at [Address].

Sincerely,

[Name]Human Resources

ACCEPTED AND AGREED on of , [Year]

BRUCE VAN SAUN

11

EX-12.1

EXHIBIT 12.1

CITIZENS FINANCIAL GROUP, INC.

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

	Three Months			Year Ended December 31,
(dollars in millions)	Ended March 31, 2016			2015			2014			2013(2)			2012			2011
Computation of Earnings:
Income (loss) from continuing operations before income tax expense		$333			$1,263			$1,268			($3,468	)		$1,024			$778
Fixed charges	127			503			417			499			669			941
Total Adjusted Earnings		$460			$1,766			$1,685			($2,969	)		$1,693			$1,719
Computation of Fixed Charges:
Interest expense		$114			$452			$363			$443			$619			$884
Portion of net rental expense deemed representative of interest(1)	13			51			54			56			50			57
Total Fixed charges		$127			$503			$417			$499			$669			$941
Ratio of Earnings to Fixed Charges	3.6		%	3.5		%	4.0		%	(5.9		)%	2.5		%	1.8		%

⁽¹⁾ The portion of rents shown as representative of the interest factor is one-quarter of total net operating lease expenses.

⁽²⁾ The deficiency for this period was $3,468 million due in part to a goodwill impairment charge of $4,435 million ($4,080 million after tax).

EX-12.2

EXHIBIT 12.2

CITIZENS FINANCIAL GROUP, INC.

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDENDS

	Three Months			Year Ended December 31,
(dollars in millions)	Ended March 31, 2016			2015			2014			2013(2)			2012			2011
Computation of Earnings:
Income (loss) from continuing operations before income tax expense		$333			$1,263			$1,268			($3,468	)		$1,024			$778
Fixed charges	134			510			417			499			669			941
Total Adjusted Earnings		$467			$1,773			$1,685			($2,969	)		$1,693			$1,719
Computation of Fixed Charges:
Interest expense		$114			$452			$363			$443			$619			$884
Portion of net rental expense deemed representative of interest(1)	13			51			54			56			50			57
Preferred distribution	7			7			—			—			—			—
Total Fixed charges		$134			$510			$417			$499			$669			$941
Ratio of Earnings to Fixed Charges and Preferred Dividends	3.4		%	3.5		%	4.0		%	(5.9		)%	2.5		%	1.8		%

⁽¹⁾ The portion of rents shown as representative of the interest factor is one-quarter of total net operating lease expenses.

⁽²⁾ The deficiency for this period was $3,468 million due in part to a goodwill impairment charge of $4,435 million ($4,080 million after tax).

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

_____________________________________________________________________________________________

I, Bruce Van Saun, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Citizens Financial Group, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date: May 9, 2016                

/s/ Bruce Van Saun

Bruce Van Saun

Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

_____________________________________________________________________________________________

I, Eric W. Aboaf, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Citizens Financial Group, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date: May 9, 2016                    

/s/ Eric W. Aboaf

Eric W. Aboaf

Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

_____________________________________________________________________________________________

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned Chief Executive Officer of Citizens Financial Group, Inc. (the "Company"), does hereby certify that:

1. The Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2016 (the “Form 10-Q”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 9, 2016

/s/ Bruce Van Saun

Bruce Van Saun

Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff on request.

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

_____________________________________________________________________________________________

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned Chief Financial Officer of Citizens Financial Group, Inc. (the "Company"), does hereby certify that:

1. The Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2016 (the “Form 10-Q”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 9, 2016

/s/ Eric W. Aboaf

Eric W. Aboaf

Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff on request.

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2016	May. 02, 2016
Document and Entity Information [Abstract]
Document Type	10-Q
Entity Central Index Key	0000759944
Amendment Flag	false
Document Period End Date	Mar. 31, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q1
Trading Symbol	CFG
Entity Registrant Name	CITIZENS FINANCIAL GROUP INC/RI
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		528,980,180

XML

CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Millions		Mar. 31, 2016	Dec. 31, 2015
ASSETS:
Cash and due from banks		$ 839	$ 1,099
Interest-bearing cash and due from banks		1,016	1,986
Interest-bearing deposits in banks		534	356
Securities available for sale, at fair value (including $297 and $4,283 pledged to creditors, respectively)	[1]	17,964	17,884
Securities held to maturity (including $0 and $135 pledged to creditors, respectively, and fair value of $5,261 and $5,297, respectively)	[1]	5,129	5,258
Other investment securities, at fair value		68	70
Other investment securities, at cost		896	863
Loans held for sale, at fair value		365	325
Other loans held for sale		386	40
Loans and leases		100,991	99,042
Less: Allowance for loan and lease losses		1,224	1,216
Net loans and leases		99,767	97,826
Derivative assets		1,068	625
Premises and equipment, net		570	595
Bank-owned life insurance		1,576	1,564
Goodwill		6,876	6,876
Due from broker		161	0
Other assets		2,862	2,841
TOTAL ASSETS		140,077	138,208
LIABILITIES:
Noninterest-bearing		27,186	27,649
Interest-bearing		75,420	74,890
Total deposits		102,606	102,539
Federal funds purchased and securities sold under agreements to repurchase		714	802
Other short-term borrowed funds		3,300	2,630
Derivative liabilities		832	485
Deferred taxes, net		852	730
Long-term borrowed funds (RBS balances of $1,125 and $1,250, respectively)		10,035	9,886
Due to broker		276	0
Other liabilities		1,497	1,490
TOTAL LIABILITIES		$ 120,112	$ 118,562
Contingencies (refer to Note 12)
STOCKHOLDERS’ EQUITY:
Preferred stock, $25.00 par value, authorized 100,000,000 shares: Series A, non-cumulative perpetual, $25.00 par value (liquidation preference $1,000), 250,000 shares authorized and issued net of issuance costs and related premium at March 31, 2016, and December 31, 2015		$ 247	$ 247
Common stock: $0.01 par value, 1,000,000,000 shares authorized, 564,276,714 shares issued and 528,933,727 shares outstanding at March 31, 2016 and 1,000,000,000 shares authorized, 563,117,415 shares issued and 527,774,428 shares outstanding at December 31, 2015		6	6
Additional paid-in capital		18,730	18,725
Retained earnings		2,076	1,913
Treasury Stock, at cost, 35,342,987 shares at March 31, 2016 and December 31, 2015.		(858)	(858)
Accumulated other comprehensive loss		(236)	(387)
TOTAL STOCKHOLDERS’ EQUITY		19,965	19,646
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$ 140,077	$ 138,208

[1] Includes only collateral pledged by the Company where counterparties have the right to sell or pledge the collateral.

XML

CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) $ in Millions	Mar. 31, 2016	Dec. 31, 2015
ASSETS:
Securities held-to-maturity, fair value	$ 5,261	$ 5,297
LIABILITIES:
Long-term borrowed funds	$ 10,035	$ 9,886
STOCKHOLDERS’ EQUITY:
Preferred stock, par value (in dollars per share)	$ 25.00	$ 25.00
Preferred stock, authorized (in shares)	100,000,000	100,000,000
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized (in shares)	1,000,000,000	1,000,000,000
Common stock, issued (in shares)	564,276,714	563,117,415
Common stock, outstanding (in shares)	528,933,727	527,774,428
Treasury stock (in shares)	35,342,987	35,342,987
Related Party
LIABILITIES:
Long-term borrowed funds	$ 1,125	$ 1,250
Series A Preferred Stock
STOCKHOLDERS’ EQUITY:
Preferred stock, par value (in dollars per share)	$ 25.00	$ 25.00
Preferred stock, authorized (in shares)	250,000	250,000
Preferred stock, issued (in shares)	250,000	250,000
Preferred stock, liquidation preference (in dollars per share)	$ 1,000	$ 1,000
Available-for-sale Securities
ASSETS:
Securities, pledged as collateral	$ 297	$ 4,283
Held-to-maturity Securities
ASSETS:
Securities, pledged as collateral	$ 0	$ 135

XML

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
INTEREST INCOME:
Interest and fees on loans and leases	$ 868	$ 779
Interest and fees on loans held for sale, at fair value	3	2
Interest and fees on other loans held for sale	1	1
Investment securities	145	159
Interest-bearing deposits in banks	2	1
Total interest income	1,019	942
INTEREST EXPENSE:
Deposits	60	52
Federal funds purchased and securities sold under agreements to repurchase	1	7
Other short-term borrowed funds	11	15
Long-term borrowed funds (RBS balances of $11 and $20, respectively)	43	32
Total interest expense	115	106
Net interest income	904	836
Provision for credit losses	91	58
Net interest income after provision for credit losses	813	778
NONINTEREST INCOME:
Service charges and fees	144	135
Card fees	50	52
Trust and investment services fees	37	36
Capital markets fees	22	22
Foreign exchange and letter of credit fees	21	23
Mortgage banking fees	18	33
Bank-owned life insurance income	13	12
Securities gains, net	9	8
Net securities impairment losses recognized in earnings	(1)	(1)
Other income	17	27
Total noninterest income	330	347
NONINTEREST EXPENSE:
Salaries and employee benefits	425	419
Outside services	91	79
Occupancy	76	80
Equipment expense	65	63
Amortization of software	39	36
Other operating expense	115	133
Total noninterest expense	811	810
Income before income tax expense	332	315
Income tax expense	109	106
NET INCOME	223	209
Net income available to common stockholders	$ 216	$ 209
Weighted-average common shares outstanding:
Basic (in Shares)	528,070,648	546,291,363
Diluted (in Shares)	530,446,188	549,798,717
Per common share information:
Basic earnings (in Dollars per Share)	$ 0.41	$ 0.38
Diluted earnings (in Dollars per Share)	0.41	0.38
Dividends declared and paid (in Dollars per Share)	$ 0.10	$ 0.10

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CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (Parenthetical) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
INTEREST EXPENSE:
Long-term borrowed funds	$ 43	$ 32
Related Party
INTEREST EXPENSE:
Long-term borrowed funds	$ 11	$ 20

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Statement of Comprehensive Income [Abstract]
Net income	$ 223	$ 209
Other comprehensive income:
Net unrealized derivative instrument gains arising during the periods, net of income taxes of $21 and $39, respectively	33	65
Reclassification adjustment for net derivative gains included in net income, net of income taxes of ($6) and ($1), respectively	(8)	(2)
Net unrealized securities available for sale gains arising during the periods, net of income taxes of $92 and $54, respectively	154	90
Other-than-temporary impairment not recognized in earnings on securities, net of income taxes of ($15) and ($11), respectively	(25)	(19)
Reclassification of net securities gains to net income, net of income taxes of ($3) and ($3), respectively	(5)	(4)
Defined benefit pension plans:
Amortization of actuarial loss, net of income taxes $2 and $1, respectively	2	2
Total other comprehensive income, net of income taxes	151	132
Total comprehensive income	$ 374	$ 341

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) (Parenthetical) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Statement of Comprehensive Income [Abstract]
Net unrealized derivative instrument gains arising during the periods, tax	$ 21	$ 39
Reclassification adjustment for net derivative gains included in net income, tax	(6)	(1)
Net unrealized securities available for sale gains arising during the periods, tax	92	54
Other-than-temporary impairment not recognized in earnings on securities, tax	(15)	(11)
Reclassification of net securities gains to net income, tax	(3)	(3)
Amortization of actuarial loss, tax	$ 2	$ 1

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) shares in Millions, $ in Millions	Total	Preferred Stock	Common Stock	Additional Paid-in Capital	Retained Earnings	Treasury Stock, at Cost	Accumulated Other Comprehensive Income (Loss)
Beginning balance (in shares) at Dec. 31, 2014		0	546
Beginning balance at Dec. 31, 2014	$ 19,268	$ 0	$ 6	$ 18,676	$ 1,294	$ (336)	$ (372)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Dividends to common stockholders	(16)				(16)
Dividends to RBS	(39)				(39)
Share-based compensation plans (in shares)			1
Share-based compensation plans	8			29		(21)
Employee stock purchase plan shares purchased	2			2
Total comprehensive income:
Net income	209				209
Other comprehensive income	132						132
Total comprehensive income	341				209		132
Ending balance (in shares) at Mar. 31, 2015		0	547
Ending balance at Mar. 31, 2015	19,564	$ 0	$ 6	18,707	1,448	(357)	(240)
Beginning balance (in shares) at Dec. 31, 2015		0	528
Beginning balance at Dec. 31, 2015	19,646	$ 247	$ 6	18,725	1,913	(858)	(387)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Dividends to common stockholders	(53)				(53)
Dividend to preferred stockholders	(7)				(7)
Share-based compensation plans (in shares)			1
Share-based compensation plans	2			2		0
Employee stock purchase plan shares purchased	3			3
Total comprehensive income:
Net income	223				223
Other comprehensive income	151						151
Total comprehensive income	374				223		151
Ending balance (in shares) at Mar. 31, 2016		0	529
Ending balance at Mar. 31, 2016	$ 19,965	$ 247	$ 6	$ 18,730	$ 2,076	$ (858)	$ (236)

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CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
OPERATING ACTIVITIES
Net income	$ 223	$ 209
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses	91	58
Originations of mortgage loans held for sale	(484)	(495)
Proceeds from sales of mortgage loans held for sale	479	462
Purchases of commercial loans held for sale	(362)	(288)
Proceeds from sales of commercial loans held for sale	345	262
Amortization of terminated cash flow hedges	15	4
Depreciation, amortization and accretion	112	113
Mortgage servicing rights valuation charge-off (recovery)	5	(1)
Securities impairment	1	1
Deferred income taxes	30	14
Share-based compensation	4	6
Gain on sales of:
Debt securities	(9)	(8)
Marketable equity securities available for sale	0	(2)
Premises and equipment	(2)	0
Increase in other assets	(339)	(136)
Increase (decrease) in other liabilities	265	(101)
Net cash provided by operating activities	374	98
INVESTING ACTIVITIES
Purchases of securities available for sale	(706)	(2,190)
Proceeds from maturities and paydowns of securities available for sale	709	865
Proceeds from sales of securities available for sale	217	1,101
Purchases of securities held to maturity	0	(181)
Proceeds from maturities and paydowns of securities held to maturity	131	150
Purchases of other investment securities, at fair value	(51)	0
Proceeds from sales of other investment securities, at fair value	53	0
Purchases of other investment securities, at cost	(37)	(6)
Proceeds from sales of other investment securities, at cost	4	11
Net increase in interest-bearing deposits in banks	(178)	(245)
Net increase in loans and leases	(2,401)	(1,183)
Net increase in bank-owned life insurance	(12)	(8)
Premises and equipment:
Purchases	(8)	(18)
Proceeds from sales	3	11
Capitalization of software	(45)	(47)
Net cash used in investing activities	(2,321)	(1,740)
FINANCING ACTIVITIES
Net increase in deposits	67	3,283
Net (decrease) increase in federal funds purchased and securities sold under agreements to repurchase	(88)	145
Net increase in other short-term borrowed funds	670	0
Proceeds from issuance of long-term borrowed funds	750	0
Repayments of long-term borrowed funds (RBS balances of $125 and $0, respectively)	(629)	(3)
Dividends declared and paid to common stockholders	(53)	(55)
Net cash provided by financing activities	717	3,370
(Decrease) increase in cash and cash equivalents	(1,230)	1,728
Cash and cash equivalents at beginning of period	3,085	3,276
Cash and cash equivalents at end of period	$ 1,855	$ 5,004

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CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Parenthetical) - USD ($) $ in Millions			3 Months Ended
	Mar. 07, 2016	Dec. 03, 2015	Mar. 31, 2016	Mar. 31, 2015
Repurchase of long-term borrowed funds			$ 629	$ 3
Related Party
Repurchase of long-term borrowed funds	$ 125	$ 750	$ 125	$ 0

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BASIS OF PRESENTATION

3 Months Ended

Mar. 31, 2016

Basis of Presentation [Abstract]

Basis of Presentation

BASIS OF PRESENTATION

Basis of Presentation

The unaudited interim Consolidated Financial Statements, including the Notes thereto of Citizens Financial Group, Inc., have been prepared in accordance with GAAP interim reporting requirements, and therefore do not include all information and Notes included in the audited Consolidated Financial Statements in conformity with GAAP. These unaudited interim Consolidated Financial Statements and Notes thereto should be read in conjunction with the Company’s audited Consolidated Financial Statements and accompanying Notes included in the Company’s Form 10-K for the year ended December 31, 2015. The Company’s principal business activity is banking, conducted through its subsidiaries, Citizens Bank, N.A. and Citizens Bank of Pennsylvania.

The unaudited interim Consolidated Financial Statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods. The results for interim periods are not necessarily indicative of results for a full year.

Certain prior period amounts have been reclassified to conform to current period presentation. These reclassifications had no effect on net income, total comprehensive income, total assets or total stockholders’ equity as previously reported.

Recent Accounting Pronouncements

In April 2016, the FASB issued ASU No. 2016-10 “Identifying Performance Obligations and Licensing.” The ASU supplements the new revenue recognition standard issued in 2014 by clarifying the guidance related to licensing and the identification of performance obligations. The ASU is effective for the Company beginning on January 1, 2018. The Company is currently assessing the impact of this guidance on the Company’s unaudited interim Consolidated Financial Statements.

In March 2016, the FASB issued ASU No. 2016-09 “Improvements to Employee Share-Based Payment Accounting.” The ASU modifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The ASU is effective for the Company beginning on January 1, 2017. Adoption of this guidance is not expected to have a material impact on the Company’s unaudited interim Consolidated Financial Statements.

In March 2016, the FASB issued ASU No. 2016-08 “Principal versus Agent Considerations (Reporting Revenue Gross versus Net).” The ASU supplements the new revenue recognition standard issued in 2014 by clarifying the implementation guidance on principal versus agent considerations. The ASU is effective for the Company beginning on January 1, 2018. The Company is currently assessing the impact of this guidance on the Company’s unaudited interim Consolidated Financial Statements.

In March 2016, the FASB issued ASU No. 2016-05 “Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships.” The ASU clarifies that a change in a counterparty to a derivative instrument that has been designated as a hedging instrument, in and of itself, does not result in a hedge de-designation under ASC 815. The ASU is effective for the Company beginning on January 1, 2017. Adoption of this guidance is not expected to have a material impact on the Company’s unaudited interim Consolidated Financial Statements.

In February 2016, the FASB issued ASU 2016-02 “Leases.” The ASU generally requires lessees to recognize a right-of use asset and corresponding lease liability for all leases with a lease term of greater than one year. The ASU is effective for the Company beginning on January 1, 2019. The Company is currently assessing the impact of this guidance on the Company’s unaudited interim Consolidated Financial Statements.

In January 2016, the FASB issued ASU No. 2016-01 “Recognition and Measurement of Financial Assets and Financial Liabilities.” The ASU requires equity investments (except for those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in the fair value recognized through net income. The ASU also requires separate presentation of financial assets and financial liabilities by measurement category and form of financial assets on the balance sheet or the notes to the financial statements. In addition, the ASU makes several other targeted amendments to the existing accounting and disclosure requirements for financial instruments, including revised guidance related to valuation allowance assessments when recognizing deferred tax assets on unrealized losses on debt securities available for sale. The ASU is effective for the Company beginning on January 1, 2018. The Company is currently assessing the impact of this guidance on the Company’s unaudited interim Consolidated Financial Statements.

In February 2015, the FASB issued ASU No. 2015-02 “Consolidation (Topic 810): Amendments to the Consolidation Analysis.” This standard focuses on the consolidation evaluation for reporting organizations that are required to evaluate whether they should consolidate certain legal entities such as limited partnerships, limited liability corporations, and securitization structures (e.g., collateralized debt obligations, collateralized loan obligations, and mortgage-backed security transactions). This new standard simplifies consolidation accounting by reducing the number of consolidation models. The ASU was effective for the Company beginning on January 1, 2016. Adoption of this guidance did not have a material impact on the Company’s unaudited interim Consolidated Financial Statements.

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SECURITIES

3 Months Ended

Mar. 31, 2016

Investments, Debt and Equity Securities [Abstract]

SECURITIES

SECURITIES

The following table provides the major components of securities at amortized cost and fair value:

	March 31, 2016									December 31, 2015
(in millions)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities Available for Sale
U.S. Treasury and other		$16		$—		$—			$16		$16		$—		$—			$16
State and political subdivisions	9		—		—			9		9		—		—			9
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	17,147		300		(13		)	17,434		17,234		153		(67		)	17,320
Other/non-agency	526		2		(40		)	488		555		4		(37		)	522
Total mortgage-backed securities	17,673		302		(53		)	17,922		17,789		157		(104		)	17,842
Total debt securities available for sale	17,698		302		(53		)	17,947		17,814		157		(104		)	17,867
Marketable equity securities	5		—		—			5		5		—		—			5
Other equity securities	12		—		—			12		12		—		—			12
Total equity securities available for sale	17		—		—			17		17		—		—			17
Total securities available for sale		$17,715		$302		($53	)		$17,964		$17,831		$157		($104	)		$17,884
Securities Held to Maturity
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities		$4,010		$93		$—			$4,103		$4,105		$27		($11	)		$4,121
Other/non-agency	1,119		39		—			1,158		1,153		23		—			1,176
Total securities held to maturity		$5,129		$132		$—			$5,261		$5,258		$50		($11	)		$5,297
Other Investment Securities, at Fair Value
Money market mutual fund		$63		$—		$—			$63		$65		$—		$—			$65
Other investments	5		—		—			5		5		—		—			5
Total other investment securities, at fair value		$68		$—		$—			$68		$70		$—		$—			$70
Other Investment Securities, at Cost
Federal Reserve Bank stock		$468		$—		$—			$468		$468		$—		$—			$468
Federal Home Loan Bank stock	428		—		—			428		395		—		—			395
Total other investment securities, at cost		$896		$—		$—			$896		$863		$—		$—			$863

The Company has reviewed its securities portfolio for other-than-temporary impairments. The following table presents the net securities impairment losses recognized in earnings:

	Three Months Ended  March 31
(in millions)	2016			2015
Other-than-temporary impairment:
Total other-than-temporary impairment losses		($41	)		($31	)
Portions of loss recognized in other comprehensive income (before taxes)	40			30
Net securities impairment losses recognized in earnings		($1	)		($1	)

The following tables summarize those securities whose fair values are below carrying values, segregated by those that have been in a continuous unrealized loss position for less than twelve months and those that have been in a continuous unrealized loss position for twelve months or longer:

	March 31, 2016
	Less than 12 Months						12 Months or Longer						Total
(dollars in millions)	Number of Issues	Fair Value		Gross Unrealized Losses			Number of Issues	Fair Value		Gross Unrealized Losses			Number of Issues	Fair Value		Gross Unrealized Losses
U.S. Treasury and other	1		$9		$—		—		$—		$—		1		$9		$—
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	15	614		(1		)	33	727		(12		)	48	1,341		(13		)
Other/non-agency	6	19		—			20	344		(40		)	26	363		(40		)
Total mortgage-backed securities	21	633		(1		)	53	1,071		(52		)	74	1,704		(53		)
Total	22		$642		($1	)	53		$1,071		($52	)	75		$1,713		($53	)

	December 31, 2015
	Less than 12 Months						12 Months or Longer						Total
(dollars in millions)	Number of Issues	Fair Value		Gross Unrealized Losses			Number of Issues	Fair Value		Gross Unrealized Losses			Number of Issues	Fair Value		Gross Unrealized Losses
State and political subdivisions	1		$9		$—		—		$—		$—		1		$9		$—
U.S. Treasury and other	1	15		—			—	—		—			1	15		—
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	162	7,423		(51		)	36	819		(27		)	198	8,242		(78		)
Other/non-agency	2	9		—			20	361		(37		)	22	370		(37		)
Total mortgage-backed securities	164	7,432		(51		)	56	1,180		(64		)	220	8,612		(115		)
Total	166		$7,456		($51	)	56		$1,180		($64	)	222		$8,636		($115	)

For each debt security identified with an unrealized loss, the Company reviews the expected cash flows to determine if the impairment in value is temporary or other-than-temporary. If the Company has determined that the present value of the debt security’s expected cash flows is less than its amortized cost basis, an other-than-temporary impairment is deemed to have occurred. The amount of impairment loss that is recognized in current period earnings is dependent on the Company’s intent to sell (or not sell) the debt security.

If the Company intends to sell the impaired debt security, the impairment loss recognized in current period earnings equals the difference between the debt security’s fair value and its amortized cost. If the Company does not intend to sell the impaired debt security, and it is not likely that the Company will be required to sell the impaired security, the credit-related impairment loss is recognized in current period earnings and equals the difference between the amortized cost of the debt security and the present value of the expected cash flows that have currently been projected.

In addition to these cash flow projections, several other characteristics of each debt security are reviewed when determining whether a credit loss exists and the period over which the debt security is expected to recover. These characteristics include: (1) the type of investment, (2) various market factors affecting the fair value of the security (e.g., interest rates, spread levels, liquidity in the sector, etc.), (3) the length and severity of impairment, and (4) the public credit rating of the instrument.

The Company estimates the portion of loss attributable to credit using a cash flow model. The inputs to this model include prepayment, default and loss severity assumptions that are based on industry research and observed data. The loss projections generated by the model are reviewed on a quarterly basis by a cross-functional governance committee. This governance committee determines whether security impairments are other-than-temporary based on this review.

The following table presents the cumulative credit-related losses recognized in earnings on debt securities held by the Company:

	Three Months Ended March 31,
(in millions)	2016			2015
Cumulative balance at beginning of period		$66			$62
Credit impairments recognized in earnings on securities that have been previously impaired	1			1
Reductions due to increases in cash flow expectations on impaired securities	(1		)	(1		)
Cumulative balance at end of period		$66			$62

Cumulative credit losses recognized in earnings for impaired AFS debt securities held as of March 31, 2016 and 2015 were $66 million and $62 million, respectively. There were no credit losses recognized in earnings for the Company’s HTM portfolio as of March 31, 2016 and 2015. For the three months endedMarch 31, 2016 and 2015, the Company recognized credit related other-than-temporary impairment losses in earnings of $1 million related to non-agency MBS in the AFS portfolio. There were no credit impaired debt securities sold during the three months endedMarch 31, 2016 and 2015. Reductions in credit losses due to increases in cash flow expectations were $1 million for the three months endedMarch 31, 2016 and 2015, and were presented in interest income from investment securities on the Consolidated Statements of Operations. The Company does not currently have the intent to sell these debt securities, and it is not likely that the Company will be required to sell these debt securities prior to the recovery of their amortized cost bases.

The Company has determined that credit losses are not expected to be incurred on the remaining agency and non-agency MBS identified with unrealized losses as of the current reporting date. The unrealized losses on these debt securities reflect the reduced liquidity in the MBS market and the increased risk spreads due to the uncertainty of the U.S. macroeconomic environment. Therefore, the Company has determined that these debt securities are not other-than-temporarily impaired because the Company does not currently have the intent to sell these debt securities, and it is not likely that the Company will be required to sell these debt securities prior to the recovery of their amortized cost bases. Any subsequent increases in the valuation of impaired debt securities do not impact their recorded cost bases. Additionally, as of March 31, 2016 and 2015, $40 million and $30 million respectively, of pre-tax non-credit related losses were deferred in OCI.

The amortized cost and fair value of debt securities at March 31, 2016 by contractual maturity are shown below. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without incurring penalties.

	Distribution of Maturities
(in millions)	1 Year or Less		1-5 Years		5-10 Years		After 10 Years		Total
Amortized Cost:
Debt securities available for sale
U.S. Treasury and other		$15		$—		$1		$—		$16
State and political subdivisions	—		—		—		9		9
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	15		37		1,790		15,305		17,147
Other/non-agency	—		57		3		466		526
Total debt securities available for sale	30		94		1,794		15,780		17,698
Debt securities held to maturity
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	—		—		—		4,010		4,010
Other/non-agency	—		—		—		1,119		1,119
Total debt securities held to maturity	—		—		—		5,129		5,129
Total amortized cost of debt securities		$30		$94		$1,794		$20,909		$22,827
Fair Value:
Debt securities available for sale
U.S. Treasury and other		$15		$—		$1		$—		$16
State and political subdivisions	—		—		—		9		9
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	15		39		1,823		15,557		17,434
Other/non-agency	—		57		3		428		488
Total debt securities available for sale	30		96		1,827		15,994		17,947
Debt securities held to maturity
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	—		—		—		4,103		4,103
Other/non-agency	—		—		—		1,158		1,158
Total debt securities held to maturity	—		—		—		5,261		5,261
Total fair value of debt securities		$30		$96		$1,827		$21,255		$23,208

The following table reports the amounts recognized in interest income from investment securities on the Consolidated Statements of Operations:

	Three Months Ended March 31,
(in millions)	2016		2015
Taxable		$145		$159
Non-taxable	—		—
Total interest income from investment securities and interest-bearing deposits in banks		$145		$159

Realized gains and losses on securities are shown below:

	Three Months Ended March 31,
(in millions)	2016		2015
Gains on sale of debt securities		$9		$12
Losses on sale of debt securities	—		(4		)
Debt securities gains, net		$9		$8
Equity securities gains		$—		$2

The amortized cost and fair value of securities pledged are shown below:

	March 31, 2016				December 31, 2015
(in millions)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Pledged against repurchase agreements		$682		$695		$805		$808
Pledged against FHLB borrowed funds	1,129		1,168		1,163		1,186
Pledged against derivatives, to qualify for fiduciary powers, and to secure public and other deposits as required by law	3,336		3,406		3,579		3,610

The Company regularly enters into security repurchase agreements with unrelated counterparties. Repurchase agreements are financial transactions that involve the transfer of a security from one party to another and a subsequent transfer of the same (or “substantially the same”) security back to the original party. The Company’s repurchase agreements are typically short-term transactions, but they may be extended to longer terms to maturity. Such transactions are accounted for as secured borrowed funds on the Company’s financial statements. When permitted by GAAP, the Company offsets the short-term receivables associated with its reverse repurchase agreements with the short-term payables associated with its repurchase agreements.

The effects of this offsetting on the Consolidated Balance Sheets are presented in the following table:

	March 31, 2016						December 31, 2015
(in millions)	Gross Assets (Liabilities)		Gross Assets (Liabilities) Offset		Net Amounts of Assets (Liabilities)		Gross Assets (Liabilities)			Gross Assets (Liabilities) Offset			Net Amounts of Assets (Liabilities)
Securities purchased under agreements to resell		$—		$—		$—		$500			($500	)		$—
Securities sold under agreements to repurchase	—		—		—		(500		)	500			—

Note: The Company also offsets certain derivative assets and derivative liabilities on the Consolidated Balance Sheets. For further information see Note 11 “Derivatives.”

There were no securitizations of mortgage loans retained in the investment portfolio for the three months ended March 31, 2016 and there were $18 million of securitizations of mortgage loans for the three months ended March 31, 2015. These securitizations included a substantive guarantee by a third party. In 2015, the guarantor was Freddie Mac. These securitizations were accounted for as a sale of the transferred loans and as a purchase of securities. The securities received from the guarantors are classified as AFS.

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LOANS AND LEASES

3 Months Ended

Mar. 31, 2016

Receivables [Abstract]

LOANS AND LEASES

LOANS AND LEASES

A summary of the loans and leases portfolio follows:

(in millions)	March 31, 2016		December 31, 2015
Commercial		$34,671		$33,264
Commercial real estate	9,406		8,971
Leases	3,895		3,979
Total commercial	47,972		46,214
Residential mortgages	13,345		13,318
Home equity loans	2,313		2,557
Home equity lines of credit	14,526		14,674
Home equity loans serviced by others (1)	930		986
Home equity lines of credit serviced by others (1)	339		389
Automobile	13,847		13,828
Student	5,006		4,359
Credit cards	1,581		1,634
Other retail	1,132		1,083
Total retail	53,019		52,828
Total loans and leases (2) (3)		$100,991		$99,042

⁽¹⁾ The Company’s SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

⁽²⁾ Excluded from the table above are loans held for sale totaling $751 million and $365 million as of March 31, 2016 and December 31, 2015, respectively.

⁽³⁾ Mortgage loans serviced for others by the Company’s subsidiaries are not included above and amounted to $17.4 billion and $17.6 billion at March 31, 2016 and December 31, 2015, respectively.

Loans held for sale at fair value totaled $365 million and $325 million at March 31, 2016 and December 31, 2015, respectively, and consisted of residential mortgages originated for sale of $292 million and the commercial trading portfolio of $73 million as of March 31, 2016. As of December 31, 2015, residential mortgages originated for sale were $268 million and the commercial trading portfolio totaled $57 million.

Other loans held for sale, at lower of cost or market value, totaled $386 million and $40 million as of March 31, 2016 and December 31, 2015, respectively. On March 31, 2016, the Company transferred $373 million of TDRs to other loans held for sale, including $288 million of residential mortgages and $85 million of home equity loans. Other loans held for sale also included commercial loans associated with the Company’s syndications business of $13 million as of March 31, 2016 compared with $40 million as of December 31, 2015. The December 31, 2015 balance consisted entirely of commercial loan syndications.

Loans pledged as collateral for FHLB borrowed funds totaled $23.7 billion and $23.2 billion at March 31, 2016 and December 31, 2015, respectively. This collateral consists primarily of residential mortgages and home equity loans. Loans pledged as collateral to support the contingent ability to borrow at the FRB discount window, if necessary, totaled $15.6 billion and $15.9 billion at March 31, 2016 and December 31, 2015, respectively.

During the three months endedMarch 31, 2016, the Company purchased $134 million of automobile loans, $120 million of residential mortgages, and $369 million of student loans. During the three months endedMarch 31, 2015, the Company purchased $249 million of residential loans, $393 million of automobile loans, and $261 million of student loans.

During the three months endedMarch 31, 2016, the Company sold $73 million of commercial loans and $173 million of residential mortgage loans. During the three months endedMarch 31, 2015, the Company sold $273 million of residential mortgage loans and $111 million of commercial loans.

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ALLOWANCE FOR CREDIT LOSSES, NONPERFORMING ASSETS, AND CONCENTRATIONS OF CREDIT RISK

3 Months Ended

Mar. 31, 2016

Receivables [Abstract]

ALLOWANCE FOR CREDIT LOSSES, NONPERFORMING ASSETS, AND CONCENTRATIONS OF CREDIT RISK

ALLOWANCE FOR CREDIT LOSSES, NONPERFORMING ASSETS, AND CONCENTRATIONS OF CREDIT RISK

The allowance for credit losses consists of the ALLL and the reserve for unfunded commitments. It is increased through a provision for credit losses that is charged to earnings, based on the Company’s quarterly evaluation of the loan portfolio, and is reduced by net charge-offs and the ALLL associated with sold loans. See Note 1 “Significant Accounting Policies” to the Company’s audited Consolidated Financial Statements in the Annual Report on Form 10-K for the year ended December 31, 2015, for a detailed discussion of ALLL reserve methodologies and estimation techniques.

On a quarterly basis, the Company reviews and refines its estimate of the allowance for credit losses, taking into consideration changes in portfolio size and composition, historical loss experience, internal risk ratings, current economic conditions, industry performance trends and other pertinent information.

There were no material changes in assumptions or estimation techniques compared with prior periods that impacted the determination of the current period’s ALLL and the reserve for unfunded lending commitments.

The following is a summary of changes in the allowance for credit losses:

	Three Months Ended March 31, 2016
(in millions)	Commercial			Retail			Total
Allowance for loan and lease losses as of January 1, 2016		$596			$620			$1,216
Charge-offs	(13		)	(113		)	(126		)
Recoveries	4			39			43
Net charge-offs	(9		)	(74		)	(83		)
Provision charged to income	46			45			91
Allowance for loan and lease losses as of March 31, 2016	633			591			1,224
Reserve for unfunded lending commitments as of January 1, 2016	58			—			58
Credit for unfunded lending commitments	—			—			—
Reserve for unfunded lending commitments as of March 31, 2016	58			—			58
Total allowance for credit losses as of March 31, 2016		$691			$591			$1,282

	Three Months Ended March 31, 2015
(in millions)	Commercial			Retail			Total
Allowance for loan and lease losses as of January 1, 2015		$544			$651			$1,195
Charge-offs	(6		)	(109		)	(115		)
Recoveries	28			33			61
Net recoveries (charge-offs)	22			(76		)	(54		)
Sales/Other	—			(2		)	(2		)
Provision charged to income	12			51			63
Allowance for loan and lease losses as of March 31, 2015	578			624			1,202
Reserve for unfunded lending commitments as of January 1, 2015	61			—			61
Provision for unfunded lending commitments	(5		)	—			(5		)
Reserve for unfunded lending commitments as of March 31, 2015	56			—			56
Total allowance for credit losses as of March 31, 2015		$634			$624			$1,258

The recorded investment in loans and leases based on the Company’s evaluation methodology is as follows:

	March 31, 2016						December 31, 2015
(in millions)	Commercial		Retail		Total		Commercial		Retail		Total
Individually evaluated		$439		$775		$1,214		$218		$1,165		$1,383
Formula-based evaluation	47,533		52,244		99,777		45,996		51,663		97,659
Total		$47,972		$53,019		$100,991		$46,214		$52,828		$99,042

The following is a summary of the allowance for credit losses by evaluation method:

	March 31, 2016						December 31, 2015
(in millions)	Commercial		Retail		Total		Commercial		Retail		Total
Individually evaluated		$42		$82		$124		$36		$101		$137
Formula-based evaluation	649		509		1,158		618		519		1,137
Allowance for credit losses		$691		$591		$1,282		$654		$620		$1,274

For commercial loans and leases, the Company utilizes regulatory classification ratings to monitor credit quality. Loans with a “pass” rating are those that the Company believes will be fully repaid in accordance with the contractual loan terms. Commercial loans and leases that are “criticized” are those that have some weakness that indicates an increased probability of future loss. For retail loans, the Company primarily uses the loan’s payment and delinquency status to monitor credit quality. The further a loan is past due, the greater the likelihood of future credit loss. These credit quality indicators for both commercial and retail loans are continually updated and monitored.

The recorded investment in classes of commercial loans and leases based on regulatory classification ratings is as follows:

	March 31, 2016
			Criticized
(in millions)	Pass		Special Mention		Substandard		Doubtful		Total
Commercial		$32,567		$928		$1,086		$90		$34,671
Commercial real estate	8,864		272		184		86		9,406
Leases	3,767		72		56		—		3,895
Total		$45,198		$1,272		$1,326		$176		$47,972

	December 31, 2015
			Criticized
(in millions)	Pass		Special Mention		Substandard		Doubtful		Total
Commercial		$31,276		$911		$1,002		$75		$33,264
Commercial real estate	8,450		272		171		78		8,971
Leases	3,880		55		44		—		3,979
Total		$43,606		$1,238		$1,217		$153		$46,214

The recorded investment in classes of retail loans, categorized by delinquency status is as follows:

	March 31, 2016
(in millions)	Current		1-29 Days Past Due		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total
Residential mortgages		$13,058		$77		$52		$7		$151		$13,345
Home equity loans	2,055		147		26		5		80		2,313
Home equity lines of credit	13,870		380		53		17		206		14,526
Home equity loans serviced by others (1)	840		55		14		1		20		930
Home equity lines of credit serviced by others (1)	250		40		9		5		35		339
Automobile	12,827		860		104		20		36		13,847
Student	4,848		87		17		9		45		5,006
Credit cards	1,511		37		10		7		16		1,581
Other retail	1,069		49		9		2		3		1,132
Total		$50,328		$1,732		$294		$73		$592		$53,019

⁽¹⁾ The Company’s SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

	December 31, 2015
(in millions)	Current		1-29 Days Past Due		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total
Residential mortgages		$12,905		$97		$54		$16		$246		$13,318
Home equity loans	2,245		164		32		12		104		2,557
Home equity lines of credit	13,982		407		60		20		205		14,674
Home equity loans serviced by others (1)	886		60		14		6		20		986
Home equity lines of credit serviced by others (1)	296		48		10		6		29		389
Automobile	12,670		964		127		32		35		13,828
Student	4,175		113		19		11		41		4,359
Credit cards	1,554		44		11		9		16		1,634
Other retail	1,013		53		8		4		5		1,083
Total		$49,726		$1,950		$335		$116		$701		$52,828

⁽¹⁾ The Company’s SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

Nonperforming Assets

The following table presents nonperforming loans and leases and loans accruing 90 days or more past due:

	Nonperforming (1)				Accruing and 90 days or more past due
(in millions)	March 31, 2016		December 31, 2015		March 31, 2016		December 31, 2015
Commercial		$284		$71		$2		$1
Commercial real estate	86		77		2		—
Leases	—		—		—		—
Total commercial	370		148		4		1
Residential mortgages (2) (3) (4)	174		331		22		—
Home equity loans (2)	99		135		—		—
Home equity lines of credit	261		272		—		—
Home equity loans serviced by others (5)	37		38		—		—
Home equity lines of credit serviced by others (5)	38		32		—		—
Automobile	42		42		—		—
Student	40		41		5		6
Credit card	16		16		—		—
Other retail	2		5		1		2
Total retail	709		912		28		8
Total		$1,079		$1,060		$32		$9

⁽¹⁾ Effective March 31, 2016, the Company began excluding loans 90 days or more past due and still accruing, which includes loans guaranteed by government-sponsored entities, from nonperforming loans and leases. Nonperforming loans and leases as of December 31, 2015 included loans and leases on nonaccrual of $1.051 billion and loans and leases accruing and 90 days or more past due of $9 million.

⁽²⁾$97 million of previously nonperforming troubled debt restructured loans were transferred from loans and leases to other loans held for sale on March 31, 2016, including $66 million of residential mortgages and $31 million of home equity loans.     

⁽³⁾ Effective March 31, 2016, the Company began excluding first lien residential mortgage loans that are 100% guaranteed by the Federal Housing Administration from nonperforming balances; $22 million of these loans are presented above as accruing and 90 days or more past due.

⁽⁴⁾ Effective March 31, 2016, the Company began excluding guaranteed residential mortgage loans sold to GNMA for which the Company had the right but not the obligation to repurchase from nonperforming balances; these totaled $37 million; these loans are consolidated on the Company’s Consolidated Balance Sheets.

⁽⁵⁾ The Company's SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

A summary of other nonperforming assets is as follows:

(in millions)	March 31, 2016		December 31, 2015
Other nonperforming assets, net of valuation allowance:
Commercial		$1		$1
Retail	47		45
Other nonperforming assets, net of valuation allowance		$48		$46

Other nonperforming assets consist primarily of other real estate owned and are presented in other assets on the Consolidated Balance Sheets.

A summary of key performance indicators is as follows:

	March 31, 2016		December 31, 2015
Nonperforming commercial loans and leases as a percentage of total loans and leases (1)	0.37	%	0.15	%
Nonperforming retail loans as a percentage of total loans and leases (1)	0.70		0.92
Total nonperforming loans and leases as a percentage of total loans and leases (1)	1.07	%	1.07	%
Nonperforming commercial assets as a percentage of total assets (1)	0.26	%	0.11	%
Nonperforming retail assets as a percentage of total assets (1)	0.54		0.69
Total nonperforming assets as a percentage of total assets (1)	0.80	%	0.80	%

⁽¹⁾ December 31, 2015 ratios included loans accruing and 90 days or more past due of $1 million and $8 million for commercial and retail, respectively.

The recorded investment in mortgage loans collateralized by residential real estate property for which formal foreclosure proceedings are in process was $216 million and $257 million as of March 31, 2016 and December 31, 2015, respectively.

The following is an analysis of the age of the past due amounts (accruing and nonaccruing):

	March 31, 2016								December 31, 2015
(in millions)	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due
Commercial		$13		$7		$287		$307		$9		$4		$71		$84
Commercial real estate	40		—		88		128		30		3		77		110
Leases	15		—		—		15		9		1		—		10
Total commercial	68		7		375		450		48		8		148		204
Residential mortgages	52		7		151		210		54		16		246		316
Home equity loans	26		5		80		111		32		12		104		148
Home equity lines of credit	53		17		206		276		60		20		205		285
Home equity loans serviced by others (1)	14		1		20		35		14		6		20		40
Home equity lines of credit serviced by others (1)	9		5		35		49		10		6		29		45
Automobile	104		20		36		160		127		32		35		194
Student	17		9		45		71		19		11		41		71
Credit cards	10		7		16		33		11		9		16		36
Other retail	9		2		3		14		8		4		5		17
Total retail	294		73		592		959		335		116		701		1,152
Total		$362		$80		$967		$1,409		$383		$124		$849		$1,356

⁽¹⁾ The Company’s SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

Impaired loans include: (1) nonaccruing larger balance commercial loans (greater than $3 million carrying value); and (2) commercial and retail TDRs (excluding loans held for sale). The following is a summary of impaired loan information by class:

	March 31, 2016
(in millions)	Impaired Loans With a Related Allowance		Allowance on Impaired Loans		Impaired Loans Without a Related Allowance		Unpaid Contractual Balance		Total Recorded Investment in Impaired Loans
Commercial		$163		$30		$208		$414		$371
Commercial real estate	56		12		12		69		68
Total commercial	219		42		220		483		439
Residential mortgages (1)	35		4		111		183		146
Home equity loans (1)	55		6		84		165		139
Home equity lines of credit	25		3		165		227		190
Home equity loans serviced by others (2)	48		7		22		84		70
Home equity lines of credit serviced by others (2)	3		—		7		14		10
Automobile	3		—		11		19		14
Student	163		47		1		164		164
Credit cards	27		11		—		27		27
Other retail	13		4		2		17		15
Total retail	372		82		403		900		775
Total		$591		$124		$623		$1,383		$1,214

⁽¹⁾ Excluded from the table above are retail TDR principal balances held for sale with a total recorded investment of $373 million, including residential mortgages of $288 million and home equity loans of $85 million.

⁽²⁾ The Company’s SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

	December 31, 2015
(in millions)	Impaired Loans With a Related Allowance		Allowance on Impaired Loans		Impaired Loans Without a Related Allowance		Unpaid Contractual Balance		Total Recorded Investment in Impaired Loans
Commercial		$92		$23		$58		$144		$150
Commercial real estate	56		13		12		70		68
Total commercial	148		36		70		214		218
Residential mortgages	121		16		320		608		441
Home equity loans	85		11		139		283		224
Home equity lines of credit	27		2		167		234		194
Home equity loans serviced by others (1)	50		8		24		88		74
Home equity lines of credit serviced by others (1)	3		1		7		14		10
Automobile	3		—		11		19		14
Student	163		48		2		165		165
Credit cards	28		11		—		28		28
Other retail	13		4		2		18		15
Total retail	493		101		672		1,457		1,165
Total		$641		$137		$742		$1,671		$1,383

⁽¹⁾ The Company’s SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

Additional information on impaired loans is as follows:

	Three Months Ended March 31,
	2016				2015
(in millions)	Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment
Commercial		$1		$201		$1		$142
Commercial real estate	—		66		—		51
Total commercial	1		267		1		193
Residential mortgages	1		142		4		441
Home equity loans	2		134		2		268
Home equity lines of credit	1		187		1		156
Home equity loans serviced by others (1)	1		71		1		88
Home equity lines of credit serviced by others (1)	—		10		—		11
Automobile	—		13		—		11
Student	2		163		2		164
Credit cards	—		27		1		30
Other retail	—		14		—		19
Total retail	7		761		11		1,188
Total		$8		$1,028		$12		$1,381

⁽¹⁾ The Company’s SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

Troubled Debt Restructurings

A loan modification is identified as a TDR when the Company or a bankruptcy court grants the borrower a concession the Company would not otherwise make in response to the borrower’s financial difficulties. TDRs typically result from the Company’s loss mitigation efforts and are undertaken in order to improve the likelihood of recovery and continuity of the relationship. The Company’s loan modifications are handled on a case-by-case basis and are negotiated to achieve mutually agreeable terms that maximize loan collectability and meet the borrower’s financial needs. Concessions granted in TDRs for all classes of loans may include lowering the interest rate, forgiving a portion of principal, extending the loan term, lowering scheduled payments for a specified period of time, principal forbearance, or capitalizing past due amounts. A rate increase can be a concession if the increased rate is lower than a market rate for debt with risk similar to that of the restructured loan. TDRs for commercial loans and leases may also involve creating a multiple note structure, accepting non-cash assets, accepting an equity interest, or receiving a performance-based fee. In some cases, a TDR may involve multiple concessions. The financial effects of TDRs for all loan classes may include lower income (either due to a lower interest rate or a delay in the timing of cash flows), larger loan loss provisions, and accelerated charge-offs if the modification renders the loan collateral-dependent. In some cases, interest income throughout the term of the loan may increase if, for example, the loan is extended or the interest rate is increased as a result of the restructuring.

Because TDRs are impaired loans, the Company measures impairment by comparing the present value of expected future cash flows, or when appropriate, the fair value of collateral, to the loan’s recorded investment. Any excess of recorded investment over the present value of expected future cash flows or collateral value is recognized by creating a valuation allowance or increasing an existing valuation allowance. Any portion of the loan’s recorded investment the Company does not expect to collect as a result of the modification is charged off at the time of modification.

Commercial TDRs were $143 million and $155 million on March 31, 2016 and December 31, 2015, respectively. Retail TDRs totaled $775 million and $1.2 billion on March 31, 2016 and December 31, 2015, respectively. On March 31, 2016, $373 million of TDRs were transferred to other loans held for sale including $288 million of residential mortgages and $85 million of home equity loans. Commitments to lend additional funds to debtors owing receivables which were TDRs were $28 million and $15 million on March 31, 2016 and December 31, 2015, respectively.

The following table summarizes how loans were modified during the three months endedMarch 31, 2016, the charge-offs related to the modifications, and the impact on the ALLL. The reported balances include loans that became TDRs during 2016 and were paid off in full, charged off, or sold prior to March 31, 2016.

	Primary Modification Types
	Interest Rate Reduction (1)					Maturity Extension (2)
(dollars in millions)	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial	5		$1		$1	26		$4		$4
Commercial real estate	—	—		—		—	—		—
Total commercial	5	1		1		26	4		4
Residential mortgages	22	3		3		6	1		1
Home equity loans	14	1		1		16	2		2
Home equity lines of credit	7	1		1		19	2		2
Home equity loans serviced by others (3)	3	—		—		—	—		—
Home equity lines of credit serviced by others (3)	—	—		—		1	—		—
Automobile	21	1		1		5	—		—
Student	—	—		—		—	—		—
Credit cards	529	3		3		—	—		—
Other retail	—	—		—		—	—		—
Total retail	596	9		9		47	5		5
Total	601		$10		$10	73		$9		$9

	Primary Modification Types
	Other (4)
(dollars in millions)	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Net Change to ALLL Resulting from Modification			Charge-offs Resulting from Modification
Commercial	5		$21		$20		($1	)		$18
Commercial real estate	—	—		—		—			—
Total commercial	5	21		20		(1		)	18
Residential mortgages	64	8		8		—			—
Home equity loans	87	6		6		—			—
Home equity lines of credit	32	2		2		—			—
Home equity loans serviced by others (3)	18	1		1		—			—
Home equity lines of credit serviced by others (3)	8	—		—		—			—
Automobile	191	3		3		—			—
Student	186	4		4		1			—
Credit cards	—	—		—		—			—
Other retail	3	—		—		—			—
Total retail	589	24		24		1			—
Total	594		$45		$44		$—			$18

⁽¹⁾ Includes modifications that consist of multiple concessions, one of which is an interest rate reduction.

⁽²⁾ Includes modifications that consist of multiple concessions, one of which is a maturity extension (unless one of the other concessions was an interest rate reduction).

⁽³⁾ The Company’s SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

⁽⁴⁾ Includes modifications other than interest rate reductions or maturity extensions, such as lowering scheduled payments for a specified period of time, principal forbearance, capitalizing arrearages, and principal forgiveness. Also included are the following: deferrals, trial modifications, certain bankruptcies, loans in forbearance and prepayment plans. Modifications can include the deferral of accrued interest resulting in post modification balances being higher than pre-modification.

The following table summarizes how loans were modified during the three months endedMarch 31, 2015, the charge-offs related to the modifications, and the impact on the ALLL. The reported balances include loans that became TDRs during 2015 and were paid off in full, charged off, or sold prior to March 31, 2015.

	Primary Modification Types
	Interest Rate Reduction (1)					Maturity Extension (2)
(dollars in millions)	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial	6		$1		$1	28		$10		$10
Commercial real estate	1	—		—		—	—		—
Total commercial	7	1		1		28	10		10
Residential mortgages	33	6		6		10	2		2
Home equity loans	21	1		1		37	5		5
Home equity lines of credit	—	—		—		3	—		—
Home equity loans serviced by others (3)	17	1		1		—	—		—
Automobile	20	1		1		1	—		—
Credit cards	604	3		3		—	—		—
Total retail	695	12		12		51	7		7
Total	702		$13		$13	79		$17		$17

	Primary Modification Types
	Other (4)
(dollars in millions)	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Net Change to ALLL Resulting from Modification			Charge-offs Resulting from Modification
Commercial	1		$2		$2		($1	)		$—
Commercial real estate	1	4		4		—			—
Total commercial	2	6		6		(1		)	—
Residential mortgages	64	6		6		(1		)	—
Home equity loans	197	10		10		—			—
Home equity lines of credit	135	8		7		—			1
Home equity loans serviced by others (3)	46	2		2		—			1
Home equity lines of credit serviced by others (3)	7	—		—		—			—
Automobile	297	5		4		—			1
Student	381	8		7		2			—
Other retail	11	—		—		—			—
Total retail	1,138	39		36		1			3
Total	1,140		$45		$42		$—			$3

⁽¹⁾ Includes modifications that consist of multiple concessions, one of which is an interest rate reduction.

⁽²⁾ Includes modifications that consist of multiple concessions, one of which is a maturity extension (unless one of the other concessions was an interest rate reduction).

⁽³⁾ The Company’s SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

⁽⁴⁾ Includes modifications other than interest rate reductions or maturity extensions, such as lowering scheduled payments for a specified period of time, principal forbearance, capitalizing arrearages, and principal forgiveness. Also included are the following: deferrals, trial modifications, certain bankruptcies, loans in forbearance and prepayment plans. Modifications can include the deferral of accrued interest resulting in post modification balances being higher than pre-modification.

The table below summarizes TDRs that defaulted during the three months endedMarch 31, 2016 and 2015 within 12 months of their modification date. For purposes of this table, a payment default is defined as being past due 90 days or more under the modified terms. Amounts represent the loan’s recorded investment at the time of payment default. Loan data includes loans meeting the criteria that were paid off in full, charged off, or sold prior to March 31, 2016 and 2015. If a TDR of any loan type becomes 90 days past due after being modified, the loan is written down to the fair value of collateral less cost to sell. The amount written off is charged to the ALLL.

	Three Months Ended March 31,
	2016			2015
(dollars in millions)	Number of Contracts	Balance Defaulted		Number of Contracts	Balance Defaulted
Commercial	3		$—	6		$—
Commercial real estate	—	—		—	—
Total commercial	3	—		6	—
Residential mortgages	54	8		49	7
Home equity loans	49	3		51	3
Home equity lines of credit	25	3		40	2
Home equity loans serviced by others (1)	10	1		16	—
Home equity lines of credit serviced by others (1)	5	—		1	—
Automobile	15	—		23	—
Student	13	—		65	2
Credit cards	121	1		102	1
Other retail	—	—		2	—
Total retail	292	16		349	15
Total	295		$16	355		$15

⁽¹⁾ The Company’s SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

Concentrations of Credit Risk

Most of the Company’s business activity is with customers located in the New England, Mid-Atlantic and Midwest regions. Generally, loans are collateralized by assets including real estate, inventory, accounts receivable, other personal property and investment securities. As of March 31, 2016 and December 31, 2015, the Company had a significant amount of loans collateralized by residential and commercial real estate. There are no significant concentrations within the commercial loan or retail loan portfolios. Exposure to credit losses arising from lending transactions may fluctuate with fair values of collateral supporting loans, which may not perform according to contractual agreements. The Company’s policy is to collateralize loans to the extent necessary; however, unsecured loans are also granted on the basis of the financial strength of the applicant and the facts surrounding the transaction.

Certain loan products, including residential mortgages, home equity loans and lines of credit, and credit cards, have contractual features that may increase credit exposure to the Company in the event of an increase in interest rates or a decline in housing values. These products include loans that exceed 90% of the value of the underlying collateral (high LTV loans), interest-only and negative amortization residential mortgages, and loans with low introductory rates. Certain loans have more than one of these characteristics.

The following table presents balances of loans with these characteristics:

	March 31, 2016
(in millions)	Residential Mortgages		Home Equity Loans and Lines of Credit		Home Equity Products Serviced by Others		Credit Cards		Student		Total
High loan-to-value		$519		$815		$695		$—		$—		$2,029
Interest only/negative amortization	1,181		—		—		—		1		1,182
Low introductory rate	—		—		—		93		—		93
Multiple characteristics and other	4		—		—		—		—		4
Total		$1,704		$815		$695		$93		$1		$3,308

	December 31, 2015
(in millions)	Residential Mortgages		Home Equity Loans and Lines of Credit		Home Equity Products Serviced by Others		Credit Cards		Student		Total
High loan-to-value		$649		$1,038		$785		$—		$—		$2,472
Interest only/negative amortization	1,110		—		—		—		—		1,110
Low introductory rate	—		3		—		96		—		99
Multiple characteristics and other	14		—		—		—		—		14
Total		$1,773		$1,041		$785		$96		$—		$3,695

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VARIABLE INTEREST ENTITIES

3 Months Ended

Mar. 31, 2016

Equity Method Investments and Joint Ventures [Abstract]

Variable Interest Entities

VARIABLE INTEREST ENTITIES

The Company makes equity investments in various entities that are considered VIEs, as defined by GAAP. These investments primarily include ownership interests in limited partnerships that sponsor affordable housing projects and ownership interests in limited liability companies that sponsor renewable energy projects. A summary of these investments is as follows:

(in millions)	March 31, 2016		December 31, 2015
LIHTC investment included in other assets		$642		$598
LIHTC unfunded commitments included in other liabilities	377		365
Renewable energy investments included in other assets	118		118

Low Income Housing Tax Credit Partnerships

The purpose of the Company’s equity investments is to assist in achieving goals of the Community Reinvestment Act and to earn an adequate return of capital. The LIHTC partnerships are managed by general partners that have the power to direct the activities which most significantly affect the performance of the partnerships. The Company is therefore not the primary beneficiary of any LIHTC partnerships. Accordingly, the Company does not consolidate these VIEs and accounts for these investments in other assets on the Consolidated Balance Sheets.

The Company applies the proportional amortization method to account for its LIHTC investments. Under the proportional amortization method, the initial investment is amortized in proportion to the actual tax credits and other tax benefits to be received in the current period as compared to the total tax credits and other tax benefits expected to be received over the life of the investment. The amortization and tax benefits are included as a component of income tax expense. The Company reports its equity share of affordable housing partnership gains and losses as an adjustment to non-interest income. The Company reports its commitments to make future investments in other liabilities on the Consolidated Balance Sheets. The Company also receives tax credits, which are reported as a reduction of income tax expense (or increase to income tax benefit) related to these transactions.

    For the three months endedMarch 31, 2016, the Company recognized $15 million of amortization expense, $15 million of tax credits and $6 million of other tax benefits associated with these investments in the provision for income taxes. For the three months endedMarch 31, 2015, the Company recognized $12 million of amortization expense, $11 million of tax credits and $4 million of other tax benefits associated with these investments in the provision for income taxes. No LIHTC investment impairment losses were recognized during the three months endedMarch 31, 2016 and 2015, respectively.

Renewable Energy Entities

The Company’s investments in renewable energy entities provide benefits from a return generated by government incentives plus other tax attributes that are associated with tax ownership (e.g., tax depreciation). As a tax equity investor, the Company does not have the power to direct the activities which most significantly affect the performance of these entities and therefore is not the primary beneficiary of any renewable energy entities. Accordingly, the Company does not consolidate these VIEs.

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MORTGAGE BANKING

3 Months Ended

Mar. 31, 2016

Mortgage Banking [Abstract]

MORTGAGE BANKING

MORTGAGE BANKING

In its mortgage banking business, the Company sells residential mortgages to government-sponsored entities and other parties, who may issue securities backed by pools of such loans. The Company retains no beneficial interests in these sales, but may retain the servicing rights of the loans sold. The Company is obligated to subsequently repurchase a loan if the purchaser discovers a standard representation or warranty violation such as noncompliance with eligibility requirements, customer fraud, or servicing violations. This primarily occurs during a loan file review.

The Company received $479 million and $747 million of proceeds from the sale of residential mortgages for the three months endedMarch 31, 2016 and 2015, respectively, and recognized gains on such sales of $14 million and $21 million for the three months endedMarch 31, 2016 and 2015, respectively. Pursuant to the standard representations and warranties obligations discussed in the preceding paragraph, the Company repurchased residential mortgage loans totaling $2 million and $4 million for the three months endedMarch 31, 2016, and 2015, respectively.

Mortgage servicing fees, a component of mortgage banking income, were $13 million and $14 million for the three months endedMarch 31, 2016 and 2015, respectively. The Company recorded valuation charge-offs of $5 million and recoveries of $1 million for its MSRs for the three months endedMarch 31, 2016 and 2015, respectively.

Changes related to MSRs were as follows:

	As of and for the Three Months Ended March 31,
(in millions)	2016			2015
MSRs:
Balance as of January 1		$173			$184
Amount capitalized	5			6
Amortization	(9		)	(10		)
Carrying amount before valuation allowance	169			180
Valuation allowance for servicing assets:
Balance as of January 1	9			18
Valuation charge-offs (recoveries)	5			(1		)
Balance at end of period	14			17
Net carrying value of MSRs		$155			$163

MSRs are presented in other assets on the Consolidated Balance Sheets.

The fair value of MSRs is estimated using a valuation model that calculates the present value of estimated future net servicing cash flows, taking into consideration actual and expected mortgage loan prepayment rates, discount rates, contractual servicing fee income, servicing costs, default rates, ancillary income, and other economic factors, which are determined based on current market conditions. The valuation model uses a static discounted cash flow methodology incorporating current market interest rates. A static model does not attempt to forecast or predict the future direction of interest rates; rather it estimates the amount and timing of future servicing cash flows using current market interest rates. The current mortgage interest rate influences the expected prepayment rate and therefore, the length of the cash flows associated with the servicing asset, while the discount rate determines the present value of those cash flows. Expected mortgage loan prepayment assumptions are obtained using the QRM Multi Component prepayment model. The Company periodically obtains third-party valuations of its MSRs to assess the reasonableness of the fair value calculated by the valuation model.

The key economic assumptions used to estimate the value of MSRs are presented in the following table:

(dollars in millions)	March 31, 2016	December 31, 2015
Fair value	$168	$178
Weighted average life (in years)	4.9	5.4
Weighted average constant prepayment rate	13.3%	11.6%
Weighted average discount rate	9.7%	9.7%

The key economic assumptions used in estimating the fair value of MSRs capitalized during the period were as follows:

	Three Months Ended March 31,
	2016	2015
Weighted average life (in years)	6.1	4.7
Weighted average constant prepayment rate	11.0%	12.2%
Weighted average discount rate	9.8%	9.6%

The sensitivity analysis below as of March 31, 2016 and December 31, 2015 presents the impact to current fair value of an immediate 50 basis points and 100 basis points adverse change in the key economic assumptions and presents the decline in fair value that would occur if the adverse change were realized. These sensitivities are hypothetical. The effect of a variation in a particular assumption on the fair value of the mortgage servicing rights is calculated independently without changing any other assumption. In reality, changes in one factor may result in changes in another (e.g., changes in interest rates, which drive changes in prepayment speeds, could result in changes in the discount rates), which might amplify or counteract the sensitivities. The primary risk inherent in the Company’s MSRs is an increase in prepayments of the underlying mortgage loans serviced, which is dependent upon market movements of interest rates.

(in millions)	March 31, 2016		December 31, 2015
Prepayment rate:
Decline in fair value from a 50 basis point decrease in interest rates		$6		$5
Decline in fair value from a 100 basis point decrease in interest rates		$14		$11
Weighted average discount rate:
Decline in fair value from a 50 basis point increase in weighted average discount rate		$3		$3
Decline in fair value from a 100 basis point increase in weighted average discount rate		$5		$6

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BORROWED FUNDS

3 Months Ended

Mar. 31, 2016

Debt Disclosure [Abstract]

BORROWED FUNDS

BORROWED FUNDS

The following is a summary of the Company’s short-term borrowed funds:

(in millions)	March 31, 2016		December 31, 2015
Federal funds purchased		$23		$—
Securities sold under agreements to repurchase	691		802
Other short-term borrowed funds (primarily current portion of FHLB advances)	3,300		2,630
Total short-term borrowed funds		$4,014		$3,432

Key data related to short-term borrowed funds is presented in the following table:

(dollars in millions)	As of and for the Three Months Ended March 31, 2016			As of and for the Year Ended December 31, 2015
Weighted-average interest rate at period-end:
Federal funds purchased and securities sold under agreements to repurchase	0.01		%	0.15		%
Other short-term borrowed funds (primarily current portion of FHLB advances)	0.57			0.44
Maximum amount outstanding at month-end during the period:
Federal funds purchased and securities sold under agreements to repurchase		$1,274			$5,375
Other short-term borrowed funds (primarily current portion of FHLB advances)	3,300			7,004
Average amount outstanding during the period:
Federal funds purchased and securities sold under agreements to repurchase		$881			$3,364
Other short-term borrowed funds (primarily current portion of FHLB advances)	3,098			5,865
Weighted-average interest rate during the period:
Federal funds purchased and securities sold under agreements to repurchase	0.06		%	0.22		%
Other short-term borrowed funds (primarily current portion of FHLB advances)	0.58			0.28

The following is a summary of the Company’s long-term borrowed funds:

(in millions)	March 31, 2016		December 31, 2015
Citizens Financial Group, Inc.:
4.150% fixed rate subordinated debt, due 2022 (1)		$347		$350
5.158% fixed-to-floating rate subordinated debt, (LIBOR + 3.56%) callable, due 2023 (2)	333		333
3.750% fixed rate subordinated debt, due 2024 (2) (3)	250		250
4.023% fixed rate subordinated debt, due 2024 (2) (4)	214		331
4.082% fixed rate subordinated debt, due 2025 (2) (5)	346		331
4.350% fixed rate subordinated debt, due 2025 (6)	248		250
4.300% fixed rate subordinated debt, due 2025 (7)	749		750
Banking Subsidiaries:
1.600% senior unsecured notes, due 2017 (8) (9)	752		749
2.300% senior unsecured notes, due 2018 (8) (10)	753		747
2.450% senior unsecured notes, due 2019 (8) (11)	763		752
2.500% senior unsecured notes, due 2019 (8)(12)	750		—
Federal Home Loan advances due through 2033	4,516		5,018
Other	14		25
Total long-term borrowed funds		$10,035		$9,886

⁽¹⁾ These balances are comprised of: principal balances of $350 million at March 31, 2016 and December 31, 2015, as well as the impact of ($3) million of unamortized deferred issuance costs and discount at March 31, 2016.

⁽²⁾ Borrowed funds with RBS. See Note 13 “Related Party Transactions and Significant Transactions with RBS” for further information.

⁽³⁾ Prior to January 1, 2016, interest was payable at a fixed rate per annum of 4.153%.

⁽⁴⁾ These balances are comprised of: principal balance of $208 million and $333 million at March 31, 2016 and December 31, 2015, respectively, as well as the impact from interest rate swaps of $6 million and ($2) million at March 31, 2016 and December 31, 2015, respectively. See Note 11 “Derivatives” for further information. In addition, on March 7, 2016, the Company repurchased $125 million of these securities from RBS. See Note 13 “Related Party Transactions and Significant Transactions with RBS” for further information.

⁽⁵⁾ These balances are comprised of: principal balance of $334 million at March 31, 2016 and December 31, 2015; impact from interest rate swaps of $12 million and ($3) million at March 31, 2016 and December 31, 2015, respectively. See Note 11 “Derivatives” for further information.

⁽⁶⁾ These balances are comprised of: principal balances of $250 million at March 31, 2016 and December 31, 2015, as well as the impact of ($2) million of unamortized deferred issuance costs and discount at March 31, 2016.

⁽⁷⁾ These balances are comprised of: principal balances of $750 million at March 31, 2016 and December 31, 2015, as well as the impact of ($1) million of unamortized deferred issuance costs and discount at March 31, 2016.

⁽⁸⁾ These securities were offered under CBNA’s Global Bank Note Program dated December 1, 2014.

⁽⁹⁾ These balances are comprised of: principal balances of $750 million at March 31, 2016 and December 31, 2015; impact from interest rate swaps of $3 million and ($1) million at March 31, 2016 and December 31, 2015, respectively; and ($1) million of unamortized deferred issuance costs and discount at March 31, 2016. See Note 11 “Derivatives” for further information.

⁽¹⁰⁾ These balances are comprised of: principal balances of $750 million at March 31, 2016 and December 31, 2015; impact from interest rate swaps of $6 million and ($3) million at March 31, 2016 and December 31, 2015, respectively; and ($3) million of unamortized deferred issuance costs and discount at March 31, 2016. See Note 11 “Derivatives” for further information.

⁽¹¹⁾ These balances are comprised of: principal balances of $750 million at March 31, 2016 and December 31, 2015; impact from interest rate swaps of $16 million and $2 million at March 31, 2016 and December 31, 2015, respectively; and ($3) million of unamortized deferred issuance costs and discount at March 31, 2016. See Note 11 “Derivatives” for further information.

⁽¹²⁾ The balance is comprised of: principal balance of $750 million at March 31, 2016; impact from interest rate swaps of $2 million and $(2) million of unamortized deferred issuance costs and discount at March 31, 2016. See Note 11 “Derivatives” for further information.

Advances, lines of credit, and letters of credit from the FHLB are collateralized by pledged mortgages and pledged securities at least sufficient to satisfy the collateral maintenance level established by the FHLB. The utilized borrowing capacity for FHLB advances and letters of credit was $12.1 billion and $11.3 billion at March 31, 2016 and December 31, 2015, respectively. The Company’s available FHLB borrowing capacity was $3.5 billionand $4.1 billion at March 31, 2016 and December 31, 2015, respectively. The Company can also borrow from the FRB discount window to meet short-term liquidity requirements. Collateral, such as investment securities and loans, was pledged to provide borrowing capacity at the FRB. At March 31, 2016, the Company’s unused secured borrowing capacity was approximately $31.6 billion, which includes unencumbered securities, FHLB borrowing capacity, and FRB discount window capacity.

The following is a summary of maturities for the Company’s long-term borrowed funds at March 31, 2016:

Year (in millions)	CFG Parent Company		Banking Subsidiaries		Consolidated
2017 or on demand		$—		$5,256		$5,256
2018	—		759		759
2019	—		1,514		1,514
2020	—		2		2
2021	—		5		5
2022 and thereafter	2,487		12		2,499
Total		$2,487		$7,548		$10,035

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STOCKHOLDERS' EQUITY

3 Months Ended

Mar. 31, 2016

Equity [Abstract]

STOCKHOLDERS' EQUITY

STOCKHOLDERS’ EQUITY

Preferred Stock

The Company had 100,000,000 shares authorized and 250,000 shares outstanding of $25.00 par value undesignated preferred stock as of March 31, 2016 and December 31, 2015, respectively. The Board of Directors or any authorized committee thereof are authorized to provide for the issuance of these shares in one or more series, and by filing a certificate pursuant to applicable law of the State of Delaware, to establish or change from time to time the number of shares of each such series, and to fix the designations, powers, including voting powers, full or limited, or no voting powers, preferences and the relative, participating, optional or other special rights of the shares of each series and any qualifications, limitations and restrictions thereof.

On April 6, 2015, the Company issued $250 million, or 250,000 shares, of 5.500% fixed-to-floating rate non-cumulative perpetual Series A Preferred Stock, par value of $25.00 per share with a liquidation preference $1,000 per share (the “Series A Preferred Stock”) to the initial purchasers in reliance on the exemption from registration provided by Section (4)(a)(2) of the Securities Act of 1933, as amended, for resale pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended. As a result of this issuance, the Company received net proceeds of $247 million after underwriting discount.

The Series A Preferred Stock has no stated maturity and is not subject to any sinking fund or other obligation of the Company. Holders of the Series A Preferred Stock will be entitled to receive dividend payments when, and if, declared by the Company’s Board of Directors or a duly authorized committee thereof. Any such dividends will be payable on a semi-annual basis at an annual rate equal to 5.500%. On April 6, 2020, the Series A Preferred Stock converts to a quarterly floating-rate basis equal to three-month U.S. dollar LIBOR on the related dividend determination date plus 3.960%.

Citizens may redeem the Series A Preferred Stock, in whole or in part on any dividend payment date, on or after April 6, 2020 or, in whole but not in part, at any time within 90 days following a regulatory capital treatment event at a redemption price equal to $1,000 per share, plus any declared and unpaid dividends, without accumulation of any undeclared dividends. Citizens may not redeem shares of the Series A Preferred Stock without obtaining the prior approval of the FRBG if then required under applicable capital guidelines.

Shares of the Series A Preferred Stock have priority over the Company's common stock with regard to the payment of dividends and, as such, the Company may not pay dividends on or repurchase, redeem, or otherwise acquire for consideration shares of its common stock unless dividends for the Series A Preferred Stock have been declared for that period and sufficient funds have been set aside to make payment.

Except in certain limited circumstances, the Series A Preferred Stock does not have any voting rights.

Treasury Stock

On August 3, 2015, CFG used the net proceeds of its public offering of $250 million aggregate principal amount 4.350% Subordinated Notes due 2025 issued on July 31, 2015, to repurchase 9,615,384 shares of its outstanding common stock directly from RBS at a public offering price of $26.00 per share. The repurchased shares are held in treasury.

On April 7, 2015, the Company used the net proceeds of the Series A Preferred Stock offering to repurchase 10,473,397 shares of its common stock from RBS at a total cost of approximately $250 million and a price per share of $23.87, which equaled the volume-weighted average price of the Company’s common stock for all traded volume over the five trading days preceding the repurchase agreement date of April 1, 2015. The repurchased shares are held in treasury.

No treasury stock activity was recorded during the three months ended March 31, 2016. During the year ended December 31, 2015, the Company recorded an additional 876,087 shares of treasury stock associated with share-based compensation plan activity for a total cost of $22 million at a weighted-average price per share of $25.50.

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EMPLOYEE BENEFITS

3 Months Ended

Mar. 31, 2016

Compensation and Retirement Disclosure [Abstract]

EMPLOYEE BENEFITS

EMPLOYEE BENEFITS

The Company maintains a non-contributory pension plan (the “Plan” or “qualified plan”) that was closed to new hires and re-hires effective January 1, 2009, and frozen to all participants effective December 31, 2012. Benefits under the Plan are based on employees’ years of service and highest five-year average of eligible compensation. The Plan is funded on a current basis, in compliance with the requirements of ERISA. The Company also provides an unfunded, non-qualified supplemental retirement plan (the “non-qualified plan”), which was closed and frozen effective December 12, 2012.

The following table presents the components of net periodic (income) cost for the Company’s qualified and non-qualified plans:

	Three Months Ended March 31,
	Qualified Plan						Non-Qualified Plan				Total
(in millions)	2016			2015			2016		2015		2016			2015
Service cost		$1			$1			$—		$—		$1			$1
Interest cost	11			11			1		1		12			12
Expected return on plan assets	(17		)	(18		)	—		—		(17		)	(18		)
Amortization of actuarial loss	4			3			—		1		4			4
Net periodic pension (income) cost		($1	)		($3	)		$1		$2		$—			($1	)

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INCOME TAXES

3 Months Ended

Mar. 31, 2016

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

Income Tax Provision

The provision for income taxes was $109 million and $106 million for the three months ended March 31, 2016 and 2015, respectively, resulting in effective tax rates of 32.9% and 33.7%, respectively. For the three months ended March 31, 2016 and 2015, the effective tax rate compared favorably to the statutory rate of 35% primarily as a result of the permanent benefits of tax credits and tax-exempt income.

Deferred Tax Liability

At March 31, 2016, the Company reported a net deferred tax liability of $852 million, compared to a $730 million liability as of December 31, 2015. The increase in the net deferred tax liability is primarily attributable to the tax effect of net unrealized gains on securities and derivatives arising during the period.

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DERIVATIVES

3 Months Ended

Mar. 31, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVES

DERIVATIVES

In the normal course of business, the Company enters into a variety of derivative transactions in order to meet the financing needs of its customers and to reduce its own exposure to fluctuations in interest rates and foreign currency exchange rates. The Company does not use derivatives for speculative purposes.

The Company’s derivative instruments are recognized on the Consolidated Balance Sheets at fair value. Information regarding the valuation methodology and inputs used to estimate the fair value of the Company’s derivative instruments is described in Note 14 “Fair Value Measurements.”

The following table identifies derivative instruments included on the Consolidated Balance Sheets in derivative assets and derivative liabilities:

	March 31, 2016								December 31, 2015
(in millions)	Notional Amount (1)		Derivative Assets			Derivative Liabilities			Notional Amount (1)		Derivative Assets			Derivative Liabilities
Derivatives designated as hedging instruments:
Interest rate swaps		$14,000		$296			$167			$16,750		$96			$50
Derivatives not designated as hedging instruments:
Interest rate swaps	35,896		739			658			33,719		540			455
Foreign exchange contracts	8,928		146			138			8,366		163			156
Other contracts	1,117		11			8			981		8			5
Total derivatives not designated as hedging instruments			896			804					711			616
Gross derivative fair values			1,192			971					807			666
Less: Gross amounts offset in the Consolidated Balance Sheets (2)			(123		)	(123		)			(178		)	(178		)
Less: Cash collateral applied (2)			(1		)	(16		)			(4		)	(3		)
Total net derivative fair values presented in the Consolidated Balance Sheets (3)				$1,068			$832					$625			$485

⁽¹⁾ The notional or contractual amount of interest rate derivatives and foreign exchange contracts is the amount upon which interest and other payments under the contract are based. Notional amounts are typically not exchanged. Therefore, notional amounts should not be taken as the measure of credit or market risk, as they do not measure the true economic risk of these contracts.

⁽²⁾ Amounts represent the impact of legally enforceable master netting agreements that allow the Company to settle positive and negative positions.

⁽³⁾ The Company also offsets assets and liabilities associated with repurchase agreements on the Consolidated Balance Sheets. See Note 2 “Securities” for further information.

The Company’s derivative transactions are internally divided into three sub-groups: institutional, customer and residential loan.

Institutional derivatives

The institutional derivatives portfolio primarily consists of interest rate swap agreements that are used to hedge the interest rate risk associated with the Company’s loans and financing liabilities (i.e., borrowed funds, deposits, etc.). The goal of the Company’s interest rate hedging activities is to manage interest rate sensitivity so that movements in interest rates do not significantly adversely affect net interest income.

The Company enters into certain interest rate swap agreements to hedge the risk associated with floating rate loans. By entering into pay-floating/receive-fixed interest rate swaps, the Company was able to minimize the variability in the cash flows of these assets due to changes in interest rates. The Company has outstanding interest rate swap agreements designed to hedge a portion of the Company’s borrowed funds and deposits. By entering into a pay-fixed/receive-floating interest rate swap, a portion of these liabilities has been effectively converted to a fixed rate liability for the term of the interest rate swap agreement. The Company has also entered into a forward-starting interest rate swap to minimize the exposure to variability in the interest cash flows on a forecasted fixed rate debt issuance.

The Company also uses receive-fixed/pay-floating interest rate swaps to manage the interest rate exposure on our medium term borrowings.

Customer derivatives

The customer derivatives portfolio consists of interest rate swap agreements and option contracts that are transacted to meet the financing needs of the Company’s customers. Offsetting swap and cap agreements are simultaneously transacted to effectively eliminate the Company’s market risk associated with the customer derivative products. The customer derivatives portfolio also includes foreign exchange contracts that are entered into on behalf of customers for the purpose of hedging exposure related to cash orders and loans and deposits denominated in foreign currency. The primary risks associated with these transactions arise from exposure to changes in foreign currency exchange rates and the ability of the counterparties to meet the terms of the contract. To manage this market risk, the Company simultaneously enters into offsetting foreign exchange contracts.

Residential loan derivatives

The Company enters into residential loan commitments that allow residential mortgage customers to lock in the interest rate on a residential mortgage while the loan undergoes the underwriting process. The Company also uses forward sales contracts to protect the value of residential mortgage loans and loan commitments that are being underwritten for future sale to investors in the secondary market.

The Company has certain derivative transactions that are designated as hedging instruments described as follows:

Derivatives designated as hedging instruments

The Company’s entire institutional hedging portfolio qualifies for hedge accounting. This includes interest rate swaps that are designated in highly effective fair value and cash flow hedging relationships. The Company formally documents at inception all hedging relationships, as well as risk management objectives and strategies for undertaking various accounting hedges. Additionally, the Company uses dollar offset or regression analysis at the hedge’s inception, and monthly thereafter to assess whether the derivatives are expected to be, or have been, highly effective in offsetting changes in the hedged item’s expected cash flows. The Company discontinues hedge accounting when it is determined that a derivative is not expected to be or has ceased to be effective as a hedge, and then reflects changes in fair value in earnings after termination of the hedge relationship.

Fair value hedges

The Company entered into interest rate swap agreements to manage the interest rate exposure on its medium term borrowings. The changes in fair value of the fair value hedges, to the extent that the hedging relationship is effective, are recorded through earnings and offset against changes in the fair value of the hedged item.

The following table summarizes certain information related to the Company’s fair value hedges:

	The Effect of Fair Value Hedges on Net Income
	Amounts Recognized in Other Income for the
	Three Months Ended March 31, 2016							Three Months Ended March 31, 2015
(in millions)	Derivative		Hedged Item			Hedge Ineffectiveness		Derivative		Hedged Item			Hedge Ineffectiveness
Hedges of interest rate risk on borrowings using interest rate swaps		$52		($52	)		$—		$9		($9	)		$—

Cash flow hedges

The Company has outstanding interest rate swap agreements designed to hedge a portion of the Company’s floating rate assets, financing liabilities (including its borrowed funds), and a forecasted debt issuance. All of these swaps have been deemed as highly effective cash flow hedges. The effective portion of the hedging gains and losses associated with these hedges are recorded in OCI; the ineffective portion of the hedging gains and losses is recorded in earnings (other income). Hedging gains and losses on derivative contracts reclassified from OCI to current period earnings are included in the line item in the accompanying Consolidated Statements of Operations in which the hedged item is recorded and in the same period that the hedged item affects earnings. During the next 12 months, approximately $1 million of net gain (pre-tax) on derivative instruments included in OCI is expected to be reclassified to net interest income in the Consolidated Statements of Operations.

Hedging gains and losses associated with the Company’s cash flow hedges are immediately reclassified from OCI to current period earnings (other income) if it becomes probable that the hedged forecasted transactions will not occur during the originally specified time period.

The following table summarizes certain information related to the Company’s cash flow hedges:

The Effect of Cash Flow Hedges on Net Income and Stockholders' Equity
	Amounts Recognized for the Three Months Ended March 31,
(in millions)	2016			2015
Effective portion of gain recognized in OCI (1)		$54			$104
Amounts reclassified from OCI to interest income (2)	22			18
Amounts reclassified from OCI to interest expense (2)	(8		)	(15		)
Ineffective portion of gain recognized in other income (3)	—			1

⁽¹⁾ The cumulative effective gains and losses on the Company’s cash flow hedging activities are included on the accumulated other comprehensive loss line item on the Consolidated Balance Sheets.

⁽²⁾ This amount includes both (a) the amortization of effective gains and losses associated with the Company’s terminated cash flow hedges and (b) the current reporting period’s interest settlements realized on the Company’s active cash flow hedges. Both (a) and (b) were previously included on the accumulated other comprehensive loss line item on the Consolidated Balance Sheets and were subsequently recorded as adjustments to the interest expense of the underlying hedged item.

⁽³⁾This amount represents the net ineffectiveness recorded during the reporting periods presented plus any amounts excluded from effectiveness testing. These amounts are reflected in the other income line item on the Consolidated Statements of Operations.

Economic hedges

The Company’s customer derivatives are recorded on the Consolidated Balance Sheets at fair value. These include interest rate and foreign exchange derivative contracts that are transacted to meet the hedging and financing needs of the Company’s customers. Mark-to-market adjustments to the fair value of customer related interest rate contracts are included in other income in the accompanying Consolidated Statements of Operations. Mark-to-market adjustments to the fair value of foreign exchange contracts relating to foreign currency loans are included in interest and fees on loans and leases in the accompanying Consolidated Statements of Operations, while all other foreign currency contract fair value changes are included in foreign exchange and letter of credit fees. In both cases, the mark-to-market gains and losses associated with the customer derivatives are mitigated by the mark-to-market gains and losses on the offsetting interest rate and foreign exchange derivative contracts transacted.

The Company’s residential loan derivatives (including residential loan commitments and forward sales contracts) are recorded on the Consolidated Balance Sheets at fair value. Mark-to-market adjustments to the fair value of residential loan commitments and forward sale contracts are included in noninterest income under mortgage banking fees.

The following table summarizes certain information related to the Company’s customer derivatives and economic hedges:

The Effect of Customer Derivatives and Economic Hedges on Net Income
	Amounts Recognized in Noninterest Income for the Three Months Ended March 31,
(in millions)	2016			2015
Customer derivative contracts
Customer interest rate contracts (1)		$97			$73
Customer foreign exchange contracts (1)	51			(35		)
Residential loan commitments (2)	4			—
Economic hedges
Offsetting derivatives transactions to hedge interest rate risk on customer interest rate contracts (1)	(91		)	(68		)
Offsetting derivatives transactions to hedge foreign exchange risk on customer foreign exchange contracts (3)	(50		)	35
Forward sale contracts (2)	(5		)	(1		)
Total		$6			$4

⁽¹⁾ Reported in other income on the Consolidated Statements of Operations.

⁽²⁾ Reported in mortgage banking fees on the Consolidated Statements of Operations.

⁽³⁾ Reported in foreign exchange and letter of credit fees on the Consolidated Statements of Operations.

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COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

The following is a summary of outstanding off-balance sheet arrangements:

(in millions)	March 31, 2016		December 31, 2015
Commitment amount:
Undrawn commitments to extend credit		$56,989		$56,524
Financial standby letters of credit	1,921		2,010
Performance letters of credit	41		42
Commercial letters of credit	63		87
Marketing rights	47		47
Risk participation agreements	53		26
Residential mortgage loans sold with recourse	10		10
Total		$59,124		$58,746

Commitments to Extend Credit

Commitments to extend credit are agreements to lend to customers in accordance with conditions contractually agreed upon in advance. Generally, the commitments have fixed expiration dates or termination clauses and may require payment of a fee. Since many of these commitments are expected to expire without being drawn upon, the contract amounts are not necessarily indicative of future cash requirements.

Letters of Credit

Standby letters of credit, both financial and performance, are issued by the Company for its customers. They are used as conditional guarantees of payment to a third party in the event the customer either fails to make specific payments (financial) or fails to complete a specific project (performance). Commercial letters of credit are used to facilitate the import of goods. The commercial letter of credit is used as the method of payment to the Company’s customers’ suppliers. The Company’s exposure to credit loss in the event of counterparty nonperformance in connection with the above instruments is represented by the contractual amount of those instruments, net of the value of collateral held. Standby letters of credit and commercial letters of credit are issued for terms of up to ten years and one year, respectively.

Generally, letters of credit are collateralized by cash, accounts receivable, inventory or investment securities. Credit risk associated with letters of credit is considered in determining the appropriate amounts of reserves for unfunded commitments.

The Company recognizes a liability on the Consolidated Balance Sheets representing its obligation to stand ready to perform over the term of the standby letters of credit in the event that the specified triggering events occur. The liability for these guarantees was $3 million at March 31, 2016 and December 31, 2015.

Marketing Rights

During 2003, the Company entered into a 25-year agreement to acquire the naming and marketing rights of a baseball stadium in Pennsylvania. The Company did not make any payment for the three months ended March 31, 2016, paid $3 million for the year ended December 31, 2015, and is obligated to pay $47 million over the remainder of the contract, including $3 million later in the year.

Risk Participation Agreements

RPAs are guarantees issued by the Company to other parties for a fee, whereby the Company agrees to participate in the credit risk of a derivative customer of the other party. Under the terms of these agreements, the “participating bank” receives a fee from the “lead bank” in exchange for the guarantee of reimbursement if the customer defaults on an interest rate swap. The interest rate swap is transacted such that any and all exchanges of interest payments (favorable and unfavorable) are made between the lead bank and the customer. In the event that an early termination of the swap occurs and the customer is unable to make a required close out payment, the participating bank assumes that obligation and is required to make this payment.

RPAs where the Company acts as the lead bank are referred to as “participations-out,” in reference to the credit risk associated with the customer derivatives being transferred out of the Company. Participations-out generally occur concurrently with the sale of new customer derivatives. RPAs where the Company acts as the participating bank are referred to as “participations-in,” in reference to the credit risk associated with the counterparty’s derivatives being assumed by the Company. The Company’s maximum credit exposure is based on its proportionate share of the settlement amount of the referenced interest rate swap. Settlement amounts are generally calculated based on the fair value of the swap plus outstanding accrued interest receivables from the customer. The Company’s estimate of the credit exposure associated with its risk participations-in as of March 31, 2016 and December 31, 2015 is $53 million and $26 million, respectively. The current amount of credit exposure is spread out over 89 counterparties. RPAs generally have terms ranging from 1-5 years; however, certain outstanding agreements have terms as long as 10 years.

Other Commitments

In November 2015, the Company entered into an agreement with RBS to purchase $500 million of its subordinated notes held by RBS by July 30, 2016, subject to regulatory approval and rating agency considerations. See Note 13 “Related party transactions and significant transactions with RBS” for more information.

On January 7, 2016, the Company entered into an agreement to purchase student loans on a quarterly basis beginning with the first calendar quarter in 2016 and ending with the fourth calendar quarter in 2016. Under the terms of the agreement, the Company committed to purchase a minimum of $125 million of loans per quarter. The minimum and maximum amount of the aggregate purchase principal balance of loans under the terms of the agreement are $500 million and $1 billion, respectively. The agreement will terminate immediately if at any time during its term the aggregate purchase principal balance of loans equals the maximum amount. The agreement may be extended by written agreement of the parties for an additional four quarters. The Company may terminate the agreement at will with payment of a termination fee equal to the product of $1 million times the number of calendar quarters remaining in the term.     

The Company’s agreement to purchase automobile loans, originally entered into in May 2014, was most recently amended on January 15, 2016. For quarterly periods on or after August 1, 2015, the minimum and maximum purchases are $50 million and $200 million, respectively. The agreement automatically renews until terminated by either party. The Company may cancel the agreement at will with payment of a variable termination fee. There is no termination fee after May 2017.

The Company’s commercial loan trading desk provides ongoing secondary market support and liquidity to its clients. Unsettled loan trades (i.e., loan purchase contracts) represent firm commitments to purchase loans from a third party at an agreed-upon price. Principal amounts associated with unsettled commercial loan trades are off-balance sheet commitments until delivery of the loans has taken place. Fair value adjustments associated with each unsettled loan trade are recognized on the Consolidated Balance Sheets and classified within other assets or other liabilities, depending on whether the fair value of the unsettled trade represents an unrealized gain or unrealized loss. The principal balance of unsettled commercial loan trade purchases and sales were $98 million and $125 million, respectively, at March 31, 2016. Settled loans purchased by the trading desk are classified as loans held for sale, at fair value on the Consolidated Balance Sheets. Refer to Note 14 “Fair Value Measurements” for further information.

Contingencies

The Company operates in a legal and regulatory environment that exposes it to potentially significant risks. A certain amount of litigation ordinarily results from the nature of the Company’s banking and other businesses. The Company is a party to legal proceedings, including class actions. The Company is also the subject of investigations, reviews, subpoenas, and regulatory matters arising out of its normal business operations, which, in some instances, relate to concerns about fair lending, unfair and/or deceptive practices, mortgage-related issues, and mis-selling of certain products. In addition, the Company engages in discussions with relevant governmental and regulatory authorities on a regular and ongoing basis regarding various issues, and any issues discussed or identified may result in investigatory or other action being taken. Litigation and regulatory matters may result in settlements, damages, fines, penalties, public or private censure, increased costs, required remediation, restrictions on business activities, or other impacts on the Company.

In these disputes and proceedings, the Company contests liability and the amount of damages as appropriate. Given their complex nature, it may be years before some of these matters are finally resolved. Moreover, before liability can be reasonably estimated for a claim, numerous legal and factual issues may need to be examined, including through potentially lengthy discovery and determination of important factual matters, and by addressing novel or unsettled legal issues relevant to the proceedings in question.

The Company cannot predict with certainty if, how, or when such claims will be resolved or what the eventual settlement, fine, penalty or other relief, if any, may be, particularly for claims that are at an early stage in their development or where claimants seek substantial or indeterminate damages. The Company recognizes a provision for a claim when, in the opinion of management after seeking legal advice, it is probable that a liability exists and the amount of loss can be reasonably estimated. In many proceedings, however, it is not possible to determine whether any loss is probable or to estimate the amount of any loss. In each of the matters described below, the Company is unable to estimate the liability in excess of any provision accrued, if any, that might arise or its effects on the Company’s Consolidated Statements of Operations or Consolidated Statements of Cash Flows in any particular period.

Set out below is a description of significant legal matters involving the Company and its banking subsidiaries. Based on information currently available, the advice of legal counsel and other advisers, and established reserves, management believes that the aggregate liabilities, if any, potentially arising from these proceedings will not have a materially adverse effect on the Company’s unaudited interim Consolidated Financial Statements.

Consumer Products Matters

The activities of the Company’s banking subsidiaries are subject to extensive laws and regulations concerning unfair or deceptive acts or practices in connection with customer products. Certain of the banking subsidiaries’ past practices have not met applicable standards, and they have implemented and are continuing to implement changes to improve and bring their practices in accordance with regulatory guidance. The Company and its banking subsidiaries have actively pursued resolution of the legacy regulatory enforcement matters set forth below.

As previously reported, CBNA is currently subject to a consent order issued in 2013 by the OCC in connection with its findings of deceptive marketing and implementation of some of our checking account and funds transfer products and services. Among other things, the consent order requires us to remedy deficiencies and develop stronger compliance controls, policies and procedures. The Company and its banking subsidiaries are also currently subject to consent orders issued in August 2015 by the CFPB, the OCC and the FDIC in connection with past deposit reconciliation practices, and CBNA is subject to a consent order issued in November 2015 by the OCC in connection with past billing and sales practices pertaining to identity theft and debt cancellation products, under which the applicable regulators have provided non-objections to, among other things, restitution plans for affected customers.

Accordingly, all financial penalties associated with these legacy regulatory enforcement matters have been paid, and substantially all remediation related to such legacy matters is expected to be resolved by the end of 2016.

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RELATED PARTY TRANSACTIONS AND SIGNIFICANT TRANSACTIONS WITH RBS

3 Months Ended

Mar. 31, 2016

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS AND SIGNIFICANT TRANSACTIONS WITH RBS

RELATED PARTY TRANSACTIONS AND SIGNIFICANT TRANSACTIONS WITH RBS

On November 3, 2015, RBS completed the sale of all of its remaining shares of CFG’s common stock. The parenthetical disclosures related to long-term borrowed funds on the Consolidated Balance Sheets, Consolidated Statements of Operations, and Consolidated Statements of Cash Flows as well as the tables and discussions below include significant related party transactions with RBS prior to the Company’s separation from RBS and significant transactions subsequent to the separation.    

In September 2014, the Company entered into certain agreements that established a framework for its ongoing relationship with RBS. Specifically, the Company entered into the following agreements with RBS: Separation and Shareholder Agreement, Registration Rights Agreement, Trade Mark License Agreement, Amended and Restated Master Services Agreement, and Transitional Services Agreements. In connection with RBS’s exit of its ownership in our common stock in 2015, the Separation and Shareholder Agreement and the Registration Rights Agreement were terminated and the Trademark License Agreement was partially terminated.

The following is a summary of borrowed funds from RBS:

	Interest Rate			Maturity Date	March 31, 2016	December 31, 2015
(dollars in millions)
Subordinated debt	5.158	%		June 2023	$333		$333
	3.750	%	(1)	July 2024	250	250
	4.023	%	(2)	October 2024	208	333
	4.082	%		January 2025	334	334

⁽¹⁾ Prior to January 1, 2016, interest was payable at a fixed rate per annum of 4.153%.

⁽²⁾ On March 7, 2016, the Company repurchased $125 million of these securities from RBS.

The following table presents total interest expense recorded on subordinated debt with RBS:

	Three Months Ended March 31,
(in millions)	2016		2015
Interest expense on subordinated debt		$11		$20

On March 7, 2016, the Company repurchased $125 million of its subordinated notes held by RBS. On December 3, 2015, the Company repurchased $750 million of outstanding subordinated debt instruments held by RBS. The $3 million difference between the reacquisition price and the net carrying amount of the repurchased debt was recognized as a gain on extinguishment of the debt and is presented in other income in the Consolidated Statement of Operations. In November 2015, the Company entered into an agreement with RBS to purchase an additional $500 million of its subordinated notes held by RBS by July 30, 2016, subject to regulatory approval and ratings agency considerations.

The Company paid no dividends to RBS for the three months endedMarch 31, 2016. For the three months endedMarch 31, 2015, the Company paid $39 million in regular common stock dividends to RBS.

Additionally, during 2015 the Company engaged in repurchases of its common stock directly from RBS. Refer to Note 8 “Stockholders’ Equity” for further information.

The Company, as a matter of policy and during the ordinary course of business with underwriting terms similar to those offered to the public, has entered into credit facilities with directors and executive officers and their immediate families, as well as their affiliated companies. Extensions of credit amounted to $126 million and $136 million at March 31, 2016 and December 31, 2015, respectively.

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FAIR VALUE MEASUREMENTS

3 Months Ended

Mar. 31, 2016

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

As discussed in Note 1 “Significant Accounting Policies,” to the Company’s audited Financial Statements in the Annual Report on Form 10-K for the year ended December 31, 2015, the Company measures or monitors many of its assets and liabilities on a fair value basis. Fair value is used on a recurring basis for assets and liabilities for which fair value is the required or elected measurement basis of accounting. Additionally, fair value is used on a nonrecurring basis to evaluate assets for impairment or for disclosure purposes. Nonrecurring fair value adjustments typically involve the application of lower of cost or market accounting or write-downs of individual assets. The Company also applies the fair value measurement guidance to determine amounts reported for certain disclosures in this Note for assets and liabilities not required to be reported at fair value in the financial statements.

The Company elected to account for residential mortgage loans held for sale and certain commercial and commercial real estate loans held for sale at fair value. Applying fair value accounting to the residential mortgage loans held for sale better aligns the reported results of the economic changes in the value of these loans and their related hedge instruments. Certain commercial and commercial real estate held for sale loans are managed by a commercial secondary loan desk that provides liquidity to banks, finance companies and institutional investors. Applying fair value accounting to this portfolio is appropriate because the Company holds these loans with the intent to sell within short term periods.

Fair Value Option

Residential Mortgage Loans Held for Sale

The fair value of residential mortgage loans held for sale is derived from observable mortgage security prices and includes adjustments for loan servicing value, agency guarantee fees, and other loan level attributes which are mostly observable in the marketplace. Credit risk does not significantly impact the valuation since these loans are sold shortly after origination. Therefore, the Company classifies the residential mortgage loans held for sale in Level 2 of the fair value hierarchy.

The election of the fair value option for financial assets and financial liabilities is optional and irrevocable. The loans accounted for under the fair value option are initially measured at fair value (i.e., acquisition cost) when the financial asset is acquired. Subsequent changes in fair value are recognized in mortgage banking fees on the Consolidated Statements of Operations. The Company recognized mortgage banking income of $6 million and $1 million for the three months ended March 31, 2016 and 2015, respectively.

Interest income on residential mortgage loans held for sale is calculated based on the contractual interest rate of the loan and is recorded in interest income.

Commercial and Commercial Real Estate Loans Held for Sale

The fair value of commercial and commercial real estate loans held for sale is estimated using observable prices of identical or similar loans that transact in the marketplace. In addition, the Company uses external pricing services that provide estimates of fair values based on quotes from various dealers transacting in the market, sector curves or benchmarking techniques. Therefore, the Company classifies the commercial and commercial real estate loans managed by the commercial secondary loan desk in Level 2 of the fair value hierarchy given the observable market inputs.

There were no loans in this portfolio that were 90 days or more past due or nonaccruing as of March 31, 2016. The loans accounted for under the fair value option are initially measured at fair value when the financial asset is recognized. Subsequent changes in fair value are recognized in current earnings. Since all loans in the Company’s commercial trading portfolio consist of floating rate obligations, all changes in fair value are due to changes in credit risk. Such credit-related fair value changes may include observed changes in overall credit spreads and/or changes to the creditworthiness of an individual borrower. Unsettled trades within the commercial trading portfolio are not recognized on the Consolidated Balance Sheets and represent off-balance sheet commitments. Refer to Note 12 “Commitments and Contingencies” for further information.

Interest income on commercial and commercial real estate loans held for sale is calculated based on the contractual interest rate of the loan and is recorded in interest income. Additionally, the Company did not recognize income for the three months ended March 31, 2016, and recognized $1 million for the three months ended March 31, 2015, in other noninterest income related to its commercial trading portfolio.

The following table summarizes the difference between the aggregate fair value and the aggregate unpaid principal balance loans held for sale measured at fair value:

	March 31, 2016						December 31, 2015
(in millions)	Aggregate Fair Value		Aggregate Unpaid Principal		Aggregate Fair Value Less Aggregate Unpaid Principal		Aggregate Fair Value		Aggregate Unpaid Principal		Aggregate Fair Value Less Aggregate Unpaid Principal
Residential mortgage loans held for sale, at fair value		$292		$281		$11		$268		$263		$5
Commercial and commercial real estate loans held for sale, at fair value	73		73		—		57		57		—

Recurring Fair Value Measurements

The Company utilizes a variety of valuation techniques to measure its assets and liabilities at fair value. Following is a description of valuation methodologies used for significant assets and liabilities carried on the balance sheet at fair value on a recurring basis:

Securities available for sale

The fair value of securities classified as AFS is based upon quoted prices, if available. Where observable quoted prices are available in an active market, securities are classified as Level 1 in the fair value hierarchy. Classes of instruments that are valued using this market approach include debt securities issued by the U.S. Treasury. If quoted market prices are not available, the fair value for the security is estimated by using pricing models, quoted prices of securities with similar characteristics or discounted cash flows. These instruments are classified as Level 2 because they currently trade in active markets and the inputs to the valuations are observable. The pricing models used to value securities generally begin with market prices (or rates) for similar instruments and make adjustments based on the unique characteristics of the instrument being valued. These adjustments reflect assumptions made regarding the sensitivity of each security’s value to changes in interest rates and prepayment speeds. Classes of instruments that are valued using this market approach include residential and commercial CMOs, specified pool mortgage “pass-through” securities and other debt securities issued by U.S. government-sponsored entities and state and political subdivisions.

A significant majority of the Company’s Level 1 and 2 securities are priced using an external pricing service. The Company verifies the accuracy of the pricing provided by its primary outside pricing service on a quarterly basis. This process involves using a secondary external vendor to provide valuations for the Company’s securities portfolio for comparison purposes. Any securities with discrepancies beyond a certain threshold are researched and, if necessary, valued by an independent outside broker.

In certain cases where there is limited activity or less transparency around inputs to the valuation model, securities are classified as Level 3.

Residential loans held for sale

See the “Fair Value Option, Residential Mortgage Loans Held for Sale” discussion above.

Commercial loans held for sale

See the “Fair Value Option, Commercial and Commercial Real Estate Loans Held for Sale” discussion above.

Derivatives

The vast majority of the Company’s derivatives portfolio is composed of “plain vanilla” interest rate swaps, which are traded in over-the-counter markets where quoted market prices are not readily available. For these interest rate derivatives, fair value is determined utilizing models that use primarily market observable inputs, such as swap rates and yield curves. The pricing models used to value interest rate swaps calculate the sum of each instrument’s fixed and variable cash flows, which are then discounted using an appropriate yield curve (i.e., LIBOR or OIS curve) to arrive at the fair value of each swap. The pricing models do not contain a high level of subjectivity as the methodologies used do not require significant judgment. The Company also considers certain adjustments to the modeled price which market participants would make when pricing each instrument, including a credit valuation adjustment that reflects the credit quality of the swap counterparty. The Company incorporates the effect of exposure to a particular counterparty’s credit by netting its derivative contracts with the collateral available and calculating a credit valuation adjustment on the basis of the net position with the counterparty where permitted. The determination of this adjustment requires judgment on behalf of Company management; however, the total amount of this portfolio-level adjustment is not material to the total fair value of the interest rate swaps in their entirety. Therefore, interest rate swaps are classified as Level 2 in the valuation hierarchy.

The Company’s other derivatives include foreign exchange contracts. Fair value of foreign exchange derivatives uses the mid-point of daily quoted currency spot prices. A valuation model estimates fair value based on the quoted spot rates together with interest rate yield curves and forward currency rates. Since all of these inputs are observable in the market, foreign exchange derivatives are classified as Level 2 in the fair value hierarchy.

Money Market Mutual Fund

Fair value is determined based upon unadjusted quoted market prices and is considered a Level 1 fair value measurement.

Other investments

The fair values of the Company’s other investments are based on security prices in the market that are not active; therefore, these investments are classified as Level 2 in the fair value hierarchy.

The following table presents assets and liabilities measured at fair value, including gross derivative assets and liabilities on a recurring basis at March 31, 2016:

(in millions)	Total		Level 1		Level 2		Level 3
Securities available for sale:
Mortgage-backed securities		$17,922		$—		$17,922		$—
State and political subdivisions	9		—		9		—
Equity securities	17		—		17		—
U.S. Treasury and other	16		15		1		—
Total securities available for sale	17,964		15		17,949		—
Loans held for sale, at fair value:
Residential loans held for sale	292		—		292		—
Commercial loans held for sale	73		—		73		—
Total loans held for sale, at fair value	365		—		365		—
Derivative assets:
Interest rate swaps	1,035		—		1,035		—
Foreign exchange contracts	146		—		146		—
Other contracts	11		—		11		—
Total derivative assets	1,192		—		1,192		—
Other investment securities, at fair value:
Money market mutual fund	63		63		—		—
Other investments	5		—		5		—
Total other investment securities, at fair value	68		63		5		—
Total assets		$19,589		$78		$19,511		$—
Derivative liabilities:
Interest rate swaps		$825		$—		$825		$—
Foreign exchange contracts	138		—		138		—
Other contracts	8		—		8		—
Total derivative liabilities	971		—		971		—
Total liabilities		$971		$—		$971		$—

The following table presents assets and liabilities measured at fair value including gross derivative assets and liabilities on a recurring basis at December 31, 2015:

(in millions)	Total		Level 1		Level 2		Level 3
Securities available for sale:
Mortgage-backed securities		$17,842		$—		$17,842		$—
State and political subdivisions	9		—		9		—
Equity securities	17		—		17		—
U.S. Treasury	16		15		1		—
Total securities available for sale	17,884		15		17,869		—
Loans held for sale, at fair value:
Residential loans held for sale	268		—		268		—
Commercial loans held for sale	57		—		57		—
Total loans held for sale, at fair value	325		—		325		—
Derivative assets:
Interest rate swaps	636		—		636		—
Foreign exchange contracts	163		—		163		—
Other contracts	8		—		8		—
Total derivative assets	807		—		807		—
Other investment securities, at fair value:
Money market mutual fund	65		65		—		—
Other investments	5		—		5		—
Total other investment securities, at fair value	70		65		5		—
Total assets		$19,086		$80		$19,006		$—
Derivative liabilities:
Interest rate swaps		$505		$—		$505		$—
Foreign exchange contracts	156		—		156		—
Other contracts	5		—		5		—
Total derivative liabilities	666		—		666		—
Total liabilities		$666		$—		$666		$—

The changes in Level 3 assets measured at fair value on a recurring basis are summarized as follows:

	Three Months Ended March 31,
(in millions)	2016		2015
Beginning as of January 1		$—		$5
Purchases, issuances, sales and settlements:
Purchases	—		1
Sales	—		—
Settlements	—		—
Net (losses) gains	—		—
Transfers from Level 3 to Level 2	—		(5		)
Balance as of March 31		$—		$1
Net unrealized gain (loss) included in net income for the year relating to assets held at period end		$—		$1

In March 2015, the Company transferred $5 million of securities from Level 3 to Level 2. The fair values of these securities are based on security prices in the market that are not active.

Nonrecurring Fair Value Measurements

The following valuation techniques are utilized to measure significant assets for which the Company utilizes fair value on a nonrecurring basis:

Impaired Loans

The carrying amount of collateral-dependent impaired loans is compared to the appraised value of the collateral less costs to dispose and is classified as Level 2. Any excess of carrying amount over the appraised value is charged to the ALLL.

Mortgage Servicing Rights

MSRs do not trade in an active market with readily observable prices. MSRs are classified as Level 3 since the valuation methodology utilizes significant unobservable inputs. At March 31, 2016, the fair value was calculated using a discounted cash flow model, which used assumptions, including weighted-average life of 4.9 years (range of 2.6 - 5.6 years), weighted-average constant prepayment rate of 13.3% (range of 12.4% - 22.3%) and weighted-average discount rate of 9.7% (range of 9.1% - 12.1%). At December 31, 2015, the fair value was calculated using a discounted cash flow model, which used assumptions, including weighted-average life of 5.4 years (range of 2.8 - 6.2 years), weighted-average constant prepayment rate of 11.6% (range of 10.7% - 22.2%) and weighted-average discount rate of 9.7% (range of 9.1% - 12.1%). Refer to Note 1 “Significant Accounting Policies” to the Company’s audited Consolidated Financial Statements in the Annual Report on Form 10-K for the year ended December 31, 2015 and Note 6 “Mortgage Banking” for more information.

Foreclosed assets

Foreclosed assets consist primarily of residential properties. Foreclosed assets are carried at the lower of carrying value or fair value less costs to dispose. Fair value is based upon independent market prices or appraised values of the collateral and is classified as Level 2.

The following table presents gains (losses) on assets and liabilities measured at fair value on a nonrecurring basis and recorded in earnings:

	Three Months Ended March 31,
(in millions)	2016			2015
Impaired collateral-dependent loans		($5	)		($3	)
MSRs	(5		)	1
Foreclosed assets	(1		)	(1		)

The following table present assets and liabilities measured at fair value on a nonrecurring basis:

	March 31, 2016								December 31, 2015
(in millions)	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Impaired collateral-dependent loans		$39		$—		$39		$—		$60		$—		$60		$—
MSRs	168		—		—		168		178		—		—		178
Foreclosed assets	46		—		46		—		42		—		42		—

Disclosures about Fair Value of Financial Instruments

Following is a description of valuation methodologies used to estimate the fair value of financial instruments for disclosure purposes (these instruments are not recorded in the financial statements at fair value):

Securities held to maturity

The fair value of securities classified as HTM is estimated using pricing models, quoted prices of securities with similar characteristics or discounted cash flow. The pricing models used to value these securities generally begin with market prices (or rates) for similar instruments and make adjustments based on the unique characteristics of the instrument being valued. These adjustments reflect assumptions made regarding the sensitivity of each security’s value to changes in interest rates and prepayment speeds.

Other investment securities, at cost

The fair value of other investment securities, at cost, such as FHLB stock and FRB stock, is assumed to approximate the cost basis of the securities. As a member of the FHLB and FRB, the Company is required to hold FHLB and FRB stock. The stock can be sold only to the FHLB and FRB upon termination of membership, or redeemed at the FHLB’s or FRB’s sole discretion.

Loans and leases

For loans and leases not recorded at fair value on a recurring basis that are not accounted for as collateral-dependent impaired loans, fair value is estimated by using one of two methods: a discounted cash flow method or a securitization method. The discounted cash flow method involves discounting the expected future cash flows using current rates which a market participant would likely use to value similar pools of loans. Inputs used in this method include observable information such as contractual cash flows (net of servicing cost) and unobservable information such as estimated prepayment speeds, credit loss exposures, and discount rates. The securitization method involves utilizing market securitization data to value the assets as if a securitization transaction had been executed. Inputs used include observable market-based MBS data and pricing adjustments based on unobservable data reflecting the liquidity risk, credit loss exposure and other characteristics of the underlying loans. The internal risk-weighted balances of loans are grouped by product type for purposes of these estimated valuations. For nonaccruing loans, fair value is estimated by discounting management’s estimate of future cash flows with a discount rate commensurate with the risk associated with such assets. Fair value of collateral-dependent loans is primarily based on the appraised value of the collateral.

Other loans held for sale

Balances are loans that were transferred to loans held for sale that are reported at the lower of cost of fair value.

Deposits

The fair value of demand deposits, checking with interest accounts, regular savings and money market accounts is the amount payable on demand at the balance sheet date. The fair value of term deposits is estimated by discounting the expected future cash flows using rates currently offered for deposits of similar remaining maturities.

Federal funds purchased and securities sold under agreements to repurchase, other short-term borrowed funds, and long-term borrowed funds

Rates currently available to the Company for debt of similar terms and remaining maturities are used to discount the expected cash flows of existing debt.

The following table is a summary of fair value for financial instruments not recorded at fair value in the unaudited interim Consolidated Financial Statements. The carrying amounts in the following table are recorded in the Consolidated Balance Sheets under the indicated captions:

	March 31, 2016
	Total				Level 1				Level 2				Level 3
(in millions)	Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value
Financial Assets:
Securities held to maturity		$5,129		$5,261		$—		$—		$5,129		$5,261		$—		$—
Other investment securities, at cost	896		896		—		—		896		896		—		—
Other loans held for sale	386		386		—		—		—		—		386		386
Loans and leases	100,991		101,475		—		—		39		39		100,952		101,436
Financial Liabilities:
Deposits	102,606		102,606		—		—		102,606		102,606		—		—
Federal funds purchased and securities sold under agreements to repurchase	714		714		—		—		714		714		—		—
Other short-term borrowed funds	3,300		3,300		—		—		3,300		3,300		—		—
Long-term borrowed funds	10,035		10,142		—		—		10,035		10,142		—		—

	December 31, 2015
	Total				Level 1				Level 2				Level 3
(in millions)	Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value
Financial Assets:
Securities held to maturity		$5,258		$5,297		$—		$—		$5,258		$5,297		$—		$—
Other investment securities, at cost	863		863		—		—		863		863		—		—
Other loans held for sale	40		40		—		—		—		—		40		40
Loans and leases	99,042		99,026		—		—		60		60		98,982		98,966
Financial Liabilities:
Deposits	102,539		102,528		—		—		102,539		102,528		—		—
Federal funds purchased and securities sold under agreements to repurchase	802		802		—		—		802		802		—		—
Other short-term borrowed funds	2,630		2,630		—		—		2,630		2,630		—		—
Long-term borrowed funds	9,886		9,837		—		—		9,886		9,837		—		—

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REGULATORY MATTERS

3 Months Ended

Mar. 31, 2016

Banking and Thrift [Abstract]

REGULATORY MATTERS

REGULATORY MATTERS

As a BHC, the Company is subject to regulation and supervision by the FRB. The primary subsidiaries of the Company are its two insured depository institutions CBNA, a national banking association whose primary federal regulator is the OCC, and CBPA, a Pennsylvania-chartered savings bank regulated by the Department of Banking of the Commonwealth of Pennsylvania and supervised by the FDIC as its primary federal regulator. Under the Basel III capital framework that took effect on January 1, 2015, the Company and its banking subsidiaries must meet specific capital requirements. Basel III requirements are expressed in terms of the following ratios: (1) common equity tier 1 capital (common equity tier 1 capital/risk-weighted on- and off-balance sheet assets); (2) tier 1 capital (tier 1 capital/risk-weighted on- and off-balance sheet assets); (3) total capital (total capital/risk-weighted on- and off-balance sheet assets); and (4) tier 1 leverage (tier 1 capital/adjusted average quarterly assets). To meet the regulatory capital requirements, the Company and its banking subsidiaries must maintain minimum regulatory levels for each ratio. In addition, the Company must not be subject to a written agreement, order or capital directive with any of its regulators. Failure to meet minimum capital requirements can result in the initiation of certain actions that, if undertaken, could have a material effect on the Company’s Consolidated Financial Statements.

The following table presents our capital and capital ratios under Basel III Transitional rules as of March 31, 2016 and December 31, 2015. Certain Basel III requirements are subject to phase-in through 2019, and these phase-in rules are used in this report of actual regulatory ratios. In addition, the Company has declared itself as an “AOCI opt-out” institution, which means that the Company will not be required to change its methodology for recognizing in regulatory capital only a subset of unrealized gains and losses that are classified as AOCI. As an AOCI opt-out institution, the Company is not required to recognize within regulatory capital the impacts of net unrealized gains and losses on securities AFS, accumulated net gains and losses on cash-flow hedges included in AOCI, net gains and losses on certain defined benefit pension plan assets, and net unrealized gains and losses on securities held to maturity that are included in AOCI.

	Transitional Basel III
									FDIA Requirements
	Actual				Minimum Capital Adequacy				Classification as Well-capitalized
(dollars in millions)	Amount		Ratio		Amount		Ratio		Amount		Ratio
As of March 31, 2016
Common equity tier 1 capital (1) (5)		$13,570	11.6	%		$5,975	5.125	%		$7,578	6.5	%
Tier 1 capital (2) (5)	13,817		11.9		7,724		6.625		9,327		8.0
Total capital (3)(5)	17,587		15.1		10,056		8.625		11,659		10.0
Tier 1 leverage (4)	13,817		10.4		5,318		4.000		6,648		5.0
As of December 31, 2015
Common equity tier 1 capital (1)		$13,389	11.7	%		$5,134	4.5	%		$7,415	6.5	%
Tier 1 capital (2)	13,636		12.0		6,845		6.0		9,127		8.0
Total capital (3)	17,505		15.3		9,127		8.0		11,408		10.0
Tier 1 leverage (4)	13,636		10.5		5,218		4.0		6,523		5.0

⁽¹⁾ “Common equity tier 1 capital ratio” represents CET1 divided by total risk-weighted assets as defined under Basel III Standardized approach.

⁽²⁾ “Tier 1 capital ratio” is tier 1 capital, which includes CET1 capital plus non-cumulative perpetual preferred equity that qualifies as additional tier 1 capital, divided by total risk-weighted assets as defined under Basel III Standardized approach.

⁽³⁾ “Total capital ratio” is total capital divided by total risk-weighted assets as defined under Basel III Standardized approach.

⁽⁴⁾ “Tier 1 leverage ratio” is tier 1 capital divided by quarterly average total assets as defined under Basel III Standardized approach.

⁽⁵⁾ “Minimum Capital ratio” for 2016 includes capital conservation buffer of .625%.

Under the Capital Plan Rule, the Company may only make capital distributions, including payment of dividends, in accordance with a capital plan that has been reviewed by the Federal Reserve and to which the Federal Reserve has not objected. In the three months endedMarch 31, 2016, the Company paid total common dividends of approximately $53 million. Additionally, in the three months endedMarch 31, 2016, the Company paid total preferred dividends of approximately $7 million.

In accordance with federal and state banking regulations, dividends paid by the Company’s banking subsidiaries to the Company itself are generally limited to the retained earnings of the respective banking subsidiaries unless specifically approved by the appropriate bank regulator.

On March 13, 2014, the OCC determined that CBNA no longer meets the condition to own a financial subsidiary — namely that CBNA must be both well capitalized and well managed. A financial subsidiary is permitted to engage in a broader range of activities, similar to those of a financial holding company, than those permissible for a national bank itself. CBNA has two financial subsidiaries, Citizens Securities, Inc., a registered broker-dealer, and RBS Citizens Insurance Agency, Inc., a dormant entity. CBNA has entered into an agreement with the OCC pursuant to which the Company has developed and submitted to the OCC a remediation plan, that sets forth the specific actions it will take to bring itself back into compliance with the conditions to own a financial subsidiary. CBNA has made substantial progress toward completing those actions. However, until the plan has been completed to the OCC’s satisfaction, CBNA will be subject to restrictions on its ability to acquire control or hold an interest in any new financial subsidiary and to commence new activities in any existing financial subsidiary without the prior consent of the OCC.

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EXIT COSTS AND RESTRUCTURING RESERVES

3 Months Ended

Mar. 31, 2016

Restructuring and Related Activities [Abstract]

EXIT COSTS AND RESTRUCTURING RESERVES

EXIT COSTS AND RESTRUCTURING RESERVES

The Company incurred no restructuring costs for the three months endedMarch 31, 2016. For the year ended December 31, 2015, the Company incurred $26 million of restructuring costs, consisting of $17 million of facilities costs in occupancy, $8 million in outside services, and $1 million in salaries and employee benefits, relating to restructuring initiatives designed to enhance operating efficiencies and reduce expense growth.

For segment reporting, all of these restructuring costs are reported within Other. See Note 18 “Business Segments” for further information.

The following table includes the activity in the exit costs and restructuring reserves:

(in millions)	Salaries & Employee Benefits			Occupancy & Equipment			Other			Total
Reserve balance as of January 1, 2015		$23			$18			$3			$44
Additions	5			18			8			31
Reversals	(4		)	(1		)	—			(5		)
Utilization	(12		)	(19		)	(6		)	(37		)
Reserve balance as of December 31, 2015	12			16			5			33
Utilization	(2		)	(2		)	(5		)	(9		)
Reserve balance as of March 31, 2016		$10			$14			$—			$24

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RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

3 Months Ended

Mar. 31, 2016

Equity [Abstract]

RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table presents the changes in the balances, net of income taxes, of each component of AOCI:

(in millions)	Net Unrealized Gains (Losses) on Derivatives			Net Unrealized Gains (Losses) on Securities			Defined Benefit Pension Plans			Total AOCI
Balance at January 1, 2015		($69	)		$74			($377	)		($372	)
Other comprehensive income before reclassifications	65			90			—			155
Other-than-temporary impairment not recognized in earnings on securities	—			(19		)	—			(19		)
Amounts reclassified from other comprehensive (loss) income	(2		)	(4		)	2			(4		)
Net other comprehensive income	63			67			2			132
Balance at March 31, 2015		($6	)		$141			($375	)		($240	)
Balance at January 1, 2016		$10			($28	)		($369	)		($387	)
Other comprehensive income before reclassifications	33			154			—			187
Other-than-temporary impairment not recognized in earnings on securities	—			(25		)	—			(25		)
Amounts reclassified from other comprehensive (loss) income	(8		)	(5		)	2			(11		)
Net other comprehensive income	25			124			2			151
Balance at March 31, 2016		$35			$96			($367	)		($236	)

The following table reports the amounts reclassified out of each component of AOCI and into the Consolidated Statements of Operations:

	Three Months Ended March 31,
(in millions)	2016			2015
Details about AOCI Components							Affected Line Item in the Consolidated Statements of Operations
Reclassification adjustment for net derivative gains (losses) included in net income:		$22			$18		Interest income
	(8		)	(15		)	Interest expense
	14			3			Income before income tax expense
	6			1			Income tax expense
		$8			$2		Net income
Reclassification of net securities gains (losses) to net income:		$9			$8		Securities gains, net
	(1		)	(1		)	Net securities impairment losses recognized in earnings
	8			7			Income before income tax expense
	3			3			Income tax expense
		$5			$4		Net income
Reclassification of changes related to defined benefit pension plans:		($4	)		($3	)	Salaries and employee benefits
	(4		)	(3		)	Income before income tax expense
	(2		)	(1		)	Income tax expense
		($2	)		($2	)	Net income
Total reclassification gains (losses)		$11			$4		Net income

The following table presents the effects to net income of the amounts reclassified out of AOCI:

	Three Months Ended March 31,
(in millions)	2016		2015
Net interest income (includes $14 and $3 of AOCI reclassifications, respectively)		$904		$836
Provision for credit losses	91		58
Noninterest income (includes $8 and $7 of AOCI reclassifications, respectively)	330		347
Noninterest expense (includes $4 and $3 of AOCI reclassifications, respectively)	811		810
Income before income tax expense	332		315
Income tax expense (includes $7 and $3 income tax net expense (benefit) from reclassification items, respectively)	109		106
Net income		$223		$209

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BUSINESS SEGMENTS

3 Months Ended

Mar. 31, 2016

Segment Reporting [Abstract]

BUSINESS SEGMENTS

BUSINESS SEGMENTS

The Company is managed by its CEO on a segment basis. The Company’s two business segments are Consumer Banking and Commercial Banking. The business segments are determined based on the products and services provided, or the type of customer served. Each segment has one or more segment heads who report directly to the CEO. The CEO has final authority over resource allocation decisions and performance assessment. The business segments reflect this management structure and the manner in which financial information is currently evaluated by the CEO. Non-segment operations are classified as Other, which includes corporate functions, the Treasury function, the securities portfolio, wholesale funding activities, intangible assets, community development, non-core assets, and other unallocated assets, liabilities, capital, revenues, provision for credit losses and expenses.

Reportable Segments

Segment results are determined based upon the Company’s management reporting system, which assigns balance sheet and income statement items to each of the business segments. The process is designed around the Company’s organizational and management structure and, accordingly, the results derived are not necessarily comparable with similar information published by other financial institutions. A description of each reportable segment and table of financial results is presented below:

Consumer Banking

The Consumer Banking segment focuses on retail customers and small businesses with annual revenues of up to $25 million. It offers traditional banking products and services, including checking, savings, home loans, student loans, credit cards, business loans and financial management services. It also operates an indirect auto financing business, providing financing for both new and used vehicles through auto dealerships. The segment’s distribution channels include a branch network, ATMs and a work force of experienced specialists ranging from financial consultants, mortgage loan officers and business banking officers to private bankers. Our Consumer Banking value proposition is based on providing simple, easy to understand product offerings and a convenient banking experience with a more personalized approach.

Commercial Banking

The Commercial Banking segment primarily targets companies with annual revenues from $25 million to $2.5 billion and provides a full complement of financial products and solutions, including loans, leases, trade financing, deposits, cash management, commercial cards, foreign exchange, interest rate risk management, corporate finance and capital markets advisory capabilities. It focuses on middle-market companies, large corporations and institutions and has dedicated teams with industry expertise in government banking, not-for-profit, healthcare, technology, professionals, oil & gas, asset finance, franchise finance, asset-based lending, commercial real estate, private equity and sponsor finance. While the segment’s business development efforts are predominantly focused in the Company’s footprint, some of its specialized industry businesses also operate selectively on a national basis (such as healthcare, asset finance and franchise finance). A key component of Commercial Banking’s growth strategy is to bring ideas to clients that help their businesses thrive, and in doing so, expand the loan portfolio and ancillary product sales.

Non-segment Operations

Other

In addition to non-segment operations, Other includes certain reconciling items in order to translate the segment results that are based on management accounting practices into consolidated results. For example, Other includes goodwill and any associated goodwill impairment charges.

	As of and for the Three Months Ended March 31, 2016
(in millions)	Consumer Banking		Commercial Banking		Other		Consolidated
Net interest income		$581		$300		$23		$904
Noninterest income	208		99		23		330
Total revenue	789		399		46		1,234
Noninterest expense	616		187		8		811
Profit before provision for credit losses	173		212		38		423
Provision for credit losses	63		9		19		91
Income before income tax expense	110		203		19		332
Income tax expense	39		70		—		109
Net income		$71		$133		$19		$223
Total average assets		$55,116		$45,304		$38,360		$138,780

	As of and for the Three Months Ended March 31, 2015
(in millions)	Consumer Banking		Commercial Banking			Other			Consolidated
Net interest income		$533		$276			$27			$836
Noninterest income	219		100			28			347
Total revenue	752		376			55			1,183
Noninterest expense	596		173			41			810
Profit before provision for credit losses	156		203			14			373
Provision for credit losses	63		(21		)	16			58
Income (loss) before income tax expense (benefit)	93		224			(2		)	315
Income tax expense (benefit)	32		77			(3		)	106
Net income		$61		$147			$1			$209
Total average assets		$51,602		$41,606			$40,117			$133,325

Management accounting practices utilized by the Company as the basis for presentation for segment results include the following:

FTP adjustments

The Company utilizes an FTP system to eliminate the effect of interest rate risk from the segments’ net interest income because such risk is centrally managed within the Treasury function. The FTP system credits (or charges) the segments with the economic value of the funds created (or used) by the segments. The FTP system provides a funds credit for sources of funds and a funds charge for the use of funds by each segment. The sum of the interest income/expense and FTP charges/credits for each segment is its designated net interest income. The variance between the Company’s cumulative FTP charges and cumulative FTP credits is offset in Other.

Provision for credit losses allocations

Provision for credit losses is allocated to each business segment based on actual net charge-offs that have been recognized by the business segment. The difference between the consolidated provision for credit losses and the business segments’ net charge-offs is reflected in Other.

Income tax allocations

Income taxes are assessed to each line of business at a standard tax rate with the residual tax expense or benefit to arrive at the consolidated effective tax rate included in Other.

Expense allocations

Noninterest expenses incurred by centrally managed operations or business lines that directly support another business line’s operations are charged to the applicable business line based on its utilization of those services.

Goodwill

For impairment testing purposes, the Company allocates goodwill to its Consumer Banking and Commercial Banking reporting units. For management reporting purposes, the Company presents the goodwill balance (and any related impairment charges) in Other.

Substantially all revenues generated and long-lived assets held by the Company’s business segments are derived from clients that reside in the United States. Neither business segment earns revenue from a single external customer that represents 10 percent or more of the Company’s total revenues.

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EARNINGS PER SHARE

3 Months Ended

Mar. 31, 2016

Earnings Per Share [Abstract]

EARNINGS PER SHARE

EARNINGS PER SHARE

	Three Months Ended March 31,
(dollars in millions, except share and per-share data)	2016		2015
Numerator (basic and diluted):
Net income		$223		$209
Less: Preferred stock dividends	7		—
Net income available to common stockholders		$216		$209
Denominator:
Weighted-average common shares outstanding - basic	528,070,648		546,291,363
Dilutive common shares: share-based awards	2,375,540		3,507,354
Weighted-average common shares outstanding - diluted	530,446,188		549,798,717
Earnings per common share:
Basic		$0.41		$0.38
Diluted	0.41		0.38

Basic EPS is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding during each period. Diluted EPS is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding during each period, plus the effect of potential dilutive common shares such as share-based awards, using the treasury stock method. Potential dilutive common shares are excluded from the computation of diluted EPS in the periods where the effect would be antidilutive.

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OTHER OPERATING EXPENSE

3 Months Ended

Mar. 31, 2016

Other Income and Expenses [Abstract]

OTHER OPERATING EXPENSE

OTHER OPERATING EXPENSE

The following table presents the details of other operating expense:

	Three Months Ended March 31,
(in millions)	2016		2015
Deposit insurance		$26		$34
Promotional expense	24		22
Postage and delivery	12		12
Other	53		65
Other operating expense		$115		$133

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SUBSEQUENT EVENTS

3 Months Ended

Mar. 31, 2016

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

The Company has evaluated the impacts of events that have occurred subsequent to March 31, 2016 through the date the Consolidated Financial Statements were filed with the SEC. Based on this evaluation, the Company has determined none of these events were required to be recognized or disclosed in the Consolidated Financial Statements and related Notes, except as follows:

On April 5, 2016, CFG submitted its 2016 Capital Plan and the results of our company-run stress tests under a new annual submission timeline established by the Federal Reserve. We expect that on or before June 30, 2016, we will receive quantitative results of the Federal Reserve’s supervisory stress tests and their qualitative assessment of our capital planning policy and process, as well as the Federal Reserve’s object/non-object decisions regarding target capital actions for the quarterly periods September 30, 2016 through June 30, 2017.

On April 7, 2016, the Company completed a $348 million purchase of student loans under the agreement entered into on January 7, 2016, wherein the Company agreed to purchase student loans on a quarterly basis beginning with the first calendar quarter in 2016 and ending with the fourth calendar quarter in 2016.

On April 21, 2016, the Company announced a quarterly common stock dividend of $0.12 per share, or $64 million, payable on May 18, 2016 to stockholders of record at the close of business on May 4, 2016.

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BASIS OF PRESENTATION (Policies)

3 Months Ended

Mar. 31, 2016

Basis of Presentation [Abstract]

Basis of Presentation

The unaudited interim Consolidated Financial Statements, including the Notes thereto of Citizens Financial Group, Inc., have been prepared in accordance with GAAP interim reporting requirements, and therefore do not include all information and Notes included in the audited Consolidated Financial Statements in conformity with GAAP. These unaudited interim Consolidated Financial Statements and Notes thereto should be read in conjunction with the Company’s audited Consolidated Financial Statements and accompanying Notes included in the Company’s Form 10-K for the year ended December 31, 2015. The Company’s principal business activity is banking, conducted through its subsidiaries, Citizens Bank, N.A. and Citizens Bank of Pennsylvania.

The unaudited interim Consolidated Financial Statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods. The results for interim periods are not necessarily indicative of results for a full year.

Reclassifications

Certain prior period amounts have been reclassified to conform to current period presentation. These reclassifications had no effect on net income, total comprehensive income, total assets or total stockholders’ equity as previously reported.

Recent Accounting Pronouncements

In April 2016, the FASB issued ASU No. 2016-10 “Identifying Performance Obligations and Licensing.” The ASU supplements the new revenue recognition standard issued in 2014 by clarifying the guidance related to licensing and the identification of performance obligations. The ASU is effective for the Company beginning on January 1, 2018. The Company is currently assessing the impact of this guidance on the Company’s unaudited interim Consolidated Financial Statements.

In March 2016, the FASB issued ASU No. 2016-09 “Improvements to Employee Share-Based Payment Accounting.” The ASU modifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The ASU is effective for the Company beginning on January 1, 2017. Adoption of this guidance is not expected to have a material impact on the Company’s unaudited interim Consolidated Financial Statements.

In March 2016, the FASB issued ASU No. 2016-08 “Principal versus Agent Considerations (Reporting Revenue Gross versus Net).” The ASU supplements the new revenue recognition standard issued in 2014 by clarifying the implementation guidance on principal versus agent considerations. The ASU is effective for the Company beginning on January 1, 2018. The Company is currently assessing the impact of this guidance on the Company’s unaudited interim Consolidated Financial Statements.

In March 2016, the FASB issued ASU No. 2016-05 “Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships.” The ASU clarifies that a change in a counterparty to a derivative instrument that has been designated as a hedging instrument, in and of itself, does not result in a hedge de-designation under ASC 815. The ASU is effective for the Company beginning on January 1, 2017. Adoption of this guidance is not expected to have a material impact on the Company’s unaudited interim Consolidated Financial Statements.

In February 2016, the FASB issued ASU 2016-02 “Leases.” The ASU generally requires lessees to recognize a right-of use asset and corresponding lease liability for all leases with a lease term of greater than one year. The ASU is effective for the Company beginning on January 1, 2019. The Company is currently assessing the impact of this guidance on the Company’s unaudited interim Consolidated Financial Statements.

In January 2016, the FASB issued ASU No. 2016-01 “Recognition and Measurement of Financial Assets and Financial Liabilities.” The ASU requires equity investments (except for those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in the fair value recognized through net income. The ASU also requires separate presentation of financial assets and financial liabilities by measurement category and form of financial assets on the balance sheet or the notes to the financial statements. In addition, the ASU makes several other targeted amendments to the existing accounting and disclosure requirements for financial instruments, including revised guidance related to valuation allowance assessments when recognizing deferred tax assets on unrealized losses on debt securities available for sale. The ASU is effective for the Company beginning on January 1, 2018. The Company is currently assessing the impact of this guidance on the Company’s unaudited interim Consolidated Financial Statements.

In February 2015, the FASB issued ASU No. 2015-02 “Consolidation (Topic 810): Amendments to the Consolidation Analysis.” This standard focuses on the consolidation evaluation for reporting organizations that are required to evaluate whether they should consolidate certain legal entities such as limited partnerships, limited liability corporations, and securitization structures (e.g., collateralized debt obligations, collateralized loan obligations, and mortgage-backed security transactions). This new standard simplifies consolidation accounting by reducing the number of consolidation models. The ASU was effective for the Company beginning on January 1, 2016. Adoption of this guidance did not have a material impact on the Company’s unaudited interim Consolidated Financial Statements.

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SECURITIES (Tables)

3 Months Ended

Mar. 31, 2016

Investments, Debt and Equity Securities [Abstract]

Schedule of securities held

The following table provides the major components of securities at amortized cost and fair value:

	March 31, 2016									December 31, 2015
(in millions)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities Available for Sale
U.S. Treasury and other		$16		$—		$—			$16		$16		$—		$—			$16
State and political subdivisions	9		—		—			9		9		—		—			9
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	17,147		300		(13		)	17,434		17,234		153		(67		)	17,320
Other/non-agency	526		2		(40		)	488		555		4		(37		)	522
Total mortgage-backed securities	17,673		302		(53		)	17,922		17,789		157		(104		)	17,842
Total debt securities available for sale	17,698		302		(53		)	17,947		17,814		157		(104		)	17,867
Marketable equity securities	5		—		—			5		5		—		—			5
Other equity securities	12		—		—			12		12		—		—			12
Total equity securities available for sale	17		—		—			17		17		—		—			17
Total securities available for sale		$17,715		$302		($53	)		$17,964		$17,831		$157		($104	)		$17,884
Securities Held to Maturity
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities		$4,010		$93		$—			$4,103		$4,105		$27		($11	)		$4,121
Other/non-agency	1,119		39		—			1,158		1,153		23		—			1,176
Total securities held to maturity		$5,129		$132		$—			$5,261		$5,258		$50		($11	)		$5,297
Other Investment Securities, at Fair Value
Money market mutual fund		$63		$—		$—			$63		$65		$—		$—			$65
Other investments	5		—		—			5		5		—		—			5
Total other investment securities, at fair value		$68		$—		$—			$68		$70		$—		$—			$70
Other Investment Securities, at Cost
Federal Reserve Bank stock		$468		$—		$—			$468		$468		$—		$—			$468
Federal Home Loan Bank stock	428		—		—			428		395		—		—			395
Total other investment securities, at cost		$896		$—		$—			$896		$863		$—		$—			$863

Other than temporary impairment recognized in earnings

The Company has reviewed its securities portfolio for other-than-temporary impairments. The following table presents the net securities impairment losses recognized in earnings:

	Three Months Ended  March 31
(in millions)	2016			2015
Other-than-temporary impairment:
Total other-than-temporary impairment losses		($41	)		($31	)
Portions of loss recognized in other comprehensive income (before taxes)	40			30
Net securities impairment losses recognized in earnings		($1	)		($1	)

Schedule of unrealized loss on investments

The following tables summarize those securities whose fair values are below carrying values, segregated by those that have been in a continuous unrealized loss position for less than twelve months and those that have been in a continuous unrealized loss position for twelve months or longer:

	March 31, 2016
	Less than 12 Months						12 Months or Longer						Total
(dollars in millions)	Number of Issues	Fair Value		Gross Unrealized Losses			Number of Issues	Fair Value		Gross Unrealized Losses			Number of Issues	Fair Value		Gross Unrealized Losses
U.S. Treasury and other	1		$9		$—		—		$—		$—		1		$9		$—
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	15	614		(1		)	33	727		(12		)	48	1,341		(13		)
Other/non-agency	6	19		—			20	344		(40		)	26	363		(40		)
Total mortgage-backed securities	21	633		(1		)	53	1,071		(52		)	74	1,704		(53		)
Total	22		$642		($1	)	53		$1,071		($52	)	75		$1,713		($53	)

	December 31, 2015
	Less than 12 Months						12 Months or Longer						Total
(dollars in millions)	Number of Issues	Fair Value		Gross Unrealized Losses			Number of Issues	Fair Value		Gross Unrealized Losses			Number of Issues	Fair Value		Gross Unrealized Losses
State and political subdivisions	1		$9		$—		—		$—		$—		1		$9		$—
U.S. Treasury and other	1	15		—			—	—		—			1	15		—
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	162	7,423		(51		)	36	819		(27		)	198	8,242		(78		)
Other/non-agency	2	9		—			20	361		(37		)	22	370		(37		)
Total mortgage-backed securities	164	7,432		(51		)	56	1,180		(64		)	220	8,612		(115		)
Total	166		$7,456		($51	)	56		$1,180		($64	)	222		$8,636		($115	)

Schedule of credit losses recognized in earnings

The following table presents the cumulative credit-related losses recognized in earnings on debt securities held by the Company:

	Three Months Ended March 31,
(in millions)	2016			2015
Cumulative balance at beginning of period		$66			$62
Credit impairments recognized in earnings on securities that have been previously impaired	1			1
Reductions due to increases in cash flow expectations on impaired securities	(1		)	(1		)
Cumulative balance at end of period		$66			$62

Schedule of investments classified by maturity date

The amortized cost and fair value of debt securities at March 31, 2016 by contractual maturity are shown below. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without incurring penalties.

	Distribution of Maturities
(in millions)	1 Year or Less		1-5 Years		5-10 Years		After 10 Years		Total
Amortized Cost:
Debt securities available for sale
U.S. Treasury and other		$15		$—		$1		$—		$16
State and political subdivisions	—		—		—		9		9
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	15		37		1,790		15,305		17,147
Other/non-agency	—		57		3		466		526
Total debt securities available for sale	30		94		1,794		15,780		17,698
Debt securities held to maturity
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	—		—		—		4,010		4,010
Other/non-agency	—		—		—		1,119		1,119
Total debt securities held to maturity	—		—		—		5,129		5,129
Total amortized cost of debt securities		$30		$94		$1,794		$20,909		$22,827
Fair Value:
Debt securities available for sale
U.S. Treasury and other		$15		$—		$1		$—		$16
State and political subdivisions	—		—		—		9		9
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	15		39		1,823		15,557		17,434
Other/non-agency	—		57		3		428		488
Total debt securities available for sale	30		96		1,827		15,994		17,947
Debt securities held to maturity
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	—		—		—		4,103		4,103
Other/non-agency	—		—		—		1,158		1,158
Total debt securities held to maturity	—		—		—		5,261		5,261
Total fair value of debt securities		$30		$96		$1,827		$21,255		$23,208

Schedule of income recognized on investment securities

The following table reports the amounts recognized in interest income from investment securities on the Consolidated Statements of Operations:

	Three Months Ended March 31,
(in millions)	2016		2015
Taxable		$145		$159
Non-taxable	—		—
Total interest income from investment securities and interest-bearing deposits in banks		$145		$159

Realized gains and losses on securities are shown below:

	Three Months Ended March 31,
(in millions)	2016		2015
Gains on sale of debt securities		$9		$12
Losses on sale of debt securities	—		(4		)
Debt securities gains, net		$9		$8
Equity securities gains		$—		$2

Schedule of financial instruments owned and pledged as collateral

The amortized cost and fair value of securities pledged are shown below:

	March 31, 2016				December 31, 2015
(in millions)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Pledged against repurchase agreements		$682		$695		$805		$808
Pledged against FHLB borrowed funds	1,129		1,168		1,163		1,186
Pledged against derivatives, to qualify for fiduciary powers, and to secure public and other deposits as required by law	3,336		3,406		3,579		3,610

Schedule of effect of repurchase agreements on balance sheet accounts

The effects of this offsetting on the Consolidated Balance Sheets are presented in the following table:

	March 31, 2016						December 31, 2015
(in millions)	Gross Assets (Liabilities)		Gross Assets (Liabilities) Offset		Net Amounts of Assets (Liabilities)		Gross Assets (Liabilities)			Gross Assets (Liabilities) Offset			Net Amounts of Assets (Liabilities)
Securities purchased under agreements to resell		$—		$—		$—		$500			($500	)		$—
Securities sold under agreements to repurchase	—		—		—		(500		)	500			—

Note: The Company also offsets certain derivative assets and derivative liabilities on the Consolidated Balance Sheets. For further information see Note 11 “Derivatives.”

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LOANS AND LEASES (Tables)

3 Months Ended

Mar. 31, 2016

Receivables [Abstract]

Schedule of loans and leases

A summary of the loans and leases portfolio follows:

(in millions)	March 31, 2016		December 31, 2015
Commercial		$34,671		$33,264
Commercial real estate	9,406		8,971
Leases	3,895		3,979
Total commercial	47,972		46,214
Residential mortgages	13,345		13,318
Home equity loans	2,313		2,557
Home equity lines of credit	14,526		14,674
Home equity loans serviced by others (1)	930		986
Home equity lines of credit serviced by others (1)	339		389
Automobile	13,847		13,828
Student	5,006		4,359
Credit cards	1,581		1,634
Other retail	1,132		1,083
Total retail	53,019		52,828
Total loans and leases (2) (3)		$100,991		$99,042

⁽¹⁾ The Company’s SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

⁽²⁾ Excluded from the table above are loans held for sale totaling $751 million and $365 million as of March 31, 2016 and December 31, 2015, respectively.

⁽³⁾ Mortgage loans serviced for others by the Company’s subsidiaries are not included above and amounted to $17.4 billion and $17.6 billion at March 31, 2016 and December 31, 2015, respectively.

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ALLOWANCE FOR CREDIT LOSSES, NONPERFORMING ASSETS, AND CONCENTRATIONS OF CREDIT RISK (Tables)

3 Months Ended

Mar. 31, 2016

Receivables [Abstract]

Schedule of changes in the allowance for credit losses

The following is a summary of changes in the allowance for credit losses:

	Three Months Ended March 31, 2016
(in millions)	Commercial			Retail			Total
Allowance for loan and lease losses as of January 1, 2016		$596			$620			$1,216
Charge-offs	(13		)	(113		)	(126		)
Recoveries	4			39			43
Net charge-offs	(9		)	(74		)	(83		)
Provision charged to income	46			45			91
Allowance for loan and lease losses as of March 31, 2016	633			591			1,224
Reserve for unfunded lending commitments as of January 1, 2016	58			—			58
Credit for unfunded lending commitments	—			—			—
Reserve for unfunded lending commitments as of March 31, 2016	58			—			58
Total allowance for credit losses as of March 31, 2016		$691			$591			$1,282

	Three Months Ended March 31, 2015
(in millions)	Commercial			Retail			Total
Allowance for loan and lease losses as of January 1, 2015		$544			$651			$1,195
Charge-offs	(6		)	(109		)	(115		)
Recoveries	28			33			61
Net recoveries (charge-offs)	22			(76		)	(54		)
Sales/Other	—			(2		)	(2		)
Provision charged to income	12			51			63
Allowance for loan and lease losses as of March 31, 2015	578			624			1,202
Reserve for unfunded lending commitments as of January 1, 2015	61			—			61
Provision for unfunded lending commitments	(5		)	—			(5		)
Reserve for unfunded lending commitments as of March 31, 2015	56			—			56
Total allowance for credit losses as of March 31, 2015		$634			$624			$1,258

Schedule of loans and leases based on evaluation method

The recorded investment in loans and leases based on the Company’s evaluation methodology is as follows:

	March 31, 2016						December 31, 2015
(in millions)	Commercial		Retail		Total		Commercial		Retail		Total
Individually evaluated		$439		$775		$1,214		$218		$1,165		$1,383
Formula-based evaluation	47,533		52,244		99,777		45,996		51,663		97,659
Total		$47,972		$53,019		$100,991		$46,214		$52,828		$99,042

Schedule of allowance for credit losses by evaluation method

The following is a summary of the allowance for credit losses by evaluation method:

	March 31, 2016						December 31, 2015
(in millions)	Commercial		Retail		Total		Commercial		Retail		Total
Individually evaluated		$42		$82		$124		$36		$101		$137
Formula-based evaluation	649		509		1,158		618		519		1,137
Allowance for credit losses		$691		$591		$1,282		$654		$620		$1,274

Schedule of classes of commercial loans and leases based on regulatory classifications

The recorded investment in classes of commercial loans and leases based on regulatory classification ratings is as follows:

	March 31, 2016
			Criticized
(in millions)	Pass		Special Mention		Substandard		Doubtful		Total
Commercial		$32,567		$928		$1,086		$90		$34,671
Commercial real estate	8,864		272		184		86		9,406
Leases	3,767		72		56		—		3,895
Total		$45,198		$1,272		$1,326		$176		$47,972

	December 31, 2015
			Criticized
(in millions)	Pass		Special Mention		Substandard		Doubtful		Total
Commercial		$31,276		$911		$1,002		$75		$33,264
Commercial real estate	8,450		272		171		78		8,971
Leases	3,880		55		44		—		3,979
Total		$43,606		$1,238		$1,217		$153		$46,214

Schedule of retail loan investments categorized by delinquency status

The recorded investment in classes of retail loans, categorized by delinquency status is as follows:

	March 31, 2016
(in millions)	Current		1-29 Days Past Due		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total
Residential mortgages		$13,058		$77		$52		$7		$151		$13,345
Home equity loans	2,055		147		26		5		80		2,313
Home equity lines of credit	13,870		380		53		17		206		14,526
Home equity loans serviced by others (1)	840		55		14		1		20		930
Home equity lines of credit serviced by others (1)	250		40		9		5		35		339
Automobile	12,827		860		104		20		36		13,847
Student	4,848		87		17		9		45		5,006
Credit cards	1,511		37		10		7		16		1,581
Other retail	1,069		49		9		2		3		1,132
Total		$50,328		$1,732		$294		$73		$592		$53,019

⁽¹⁾ The Company’s SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

	December 31, 2015
(in millions)	Current		1-29 Days Past Due		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total
Residential mortgages		$12,905		$97		$54		$16		$246		$13,318
Home equity loans	2,245		164		32		12		104		2,557
Home equity lines of credit	13,982		407		60		20		205		14,674
Home equity loans serviced by others (1)	886		60		14		6		20		986
Home equity lines of credit serviced by others (1)	296		48		10		6		29		389
Automobile	12,670		964		127		32		35		13,828
Student	4,175		113		19		11		41		4,359
Credit cards	1,554		44		11		9		16		1,634
Other retail	1,013		53		8		4		5		1,083
Total		$49,726		$1,950		$335		$116		$701		$52,828

⁽¹⁾ The Company’s SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

Schedule of nonperforming loans and leases by class

The following table presents nonperforming loans and leases and loans accruing 90 days or more past due:

	Nonperforming (1)				Accruing and 90 days or more past due
(in millions)	March 31, 2016		December 31, 2015		March 31, 2016		December 31, 2015
Commercial		$284		$71		$2		$1
Commercial real estate	86		77		2		—
Leases	—		—		—		—
Total commercial	370		148		4		1
Residential mortgages (2) (3) (4)	174		331		22		—
Home equity loans (2)	99		135		—		—
Home equity lines of credit	261		272		—		—
Home equity loans serviced by others (5)	37		38		—		—
Home equity lines of credit serviced by others (5)	38		32		—		—
Automobile	42		42		—		—
Student	40		41		5		6
Credit card	16		16		—		—
Other retail	2		5		1		2
Total retail	709		912		28		8
Total		$1,079		$1,060		$32		$9

⁽¹⁾ Effective March 31, 2016, the Company began excluding loans 90 days or more past due and still accruing, which includes loans guaranteed by government-sponsored entities, from nonperforming loans and leases. Nonperforming loans and leases as of December 31, 2015 included loans and leases on nonaccrual of $1.051 billion and loans and leases accruing and 90 days or more past due of $9 million.

⁽²⁾$97 million of previously nonperforming troubled debt restructured loans were transferred from loans and leases to other loans held for sale on March 31, 2016, including $66 million of residential mortgages and $31 million of home equity loans.     

⁽³⁾ Effective March 31, 2016, the Company began excluding first lien residential mortgage loans that are 100% guaranteed by the Federal Housing Administration from nonperforming balances; $22 million of these loans are presented above as accruing and 90 days or more past due.

⁽⁴⁾ Effective March 31, 2016, the Company began excluding guaranteed residential mortgage loans sold to GNMA for which the Company had the right but not the obligation to repurchase from nonperforming balances; these totaled $37 million; these loans are consolidated on the Company’s Consolidated Balance Sheets.

⁽⁵⁾ The Company's SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

Schedule of nonperforming assets

A summary of other nonperforming assets is as follows:

(in millions)	March 31, 2016		December 31, 2015
Other nonperforming assets, net of valuation allowance:
Commercial		$1		$1
Retail	47		45
Other nonperforming assets, net of valuation allowance		$48		$46

Summary of key performance indicators

A summary of key performance indicators is as follows:

	March 31, 2016		December 31, 2015
Nonperforming commercial loans and leases as a percentage of total loans and leases (1)	0.37	%	0.15	%
Nonperforming retail loans as a percentage of total loans and leases (1)	0.70		0.92
Total nonperforming loans and leases as a percentage of total loans and leases (1)	1.07	%	1.07	%
Nonperforming commercial assets as a percentage of total assets (1)	0.26	%	0.11	%
Nonperforming retail assets as a percentage of total assets (1)	0.54		0.69
Total nonperforming assets as a percentage of total assets (1)	0.80	%	0.80	%

⁽¹⁾ December 31, 2015 ratios included loans accruing and 90 days or more past due of $1 million and $8 million for commercial and retail, respectively.

Analysis of age of past due amounts

The following is an analysis of the age of the past due amounts (accruing and nonaccruing):

	March 31, 2016								December 31, 2015
(in millions)	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due
Commercial		$13		$7		$287		$307		$9		$4		$71		$84
Commercial real estate	40		—		88		128		30		3		77		110
Leases	15		—		—		15		9		1		—		10
Total commercial	68		7		375		450		48		8		148		204
Residential mortgages	52		7		151		210		54		16		246		316
Home equity loans	26		5		80		111		32		12		104		148
Home equity lines of credit	53		17		206		276		60		20		205		285
Home equity loans serviced by others (1)	14		1		20		35		14		6		20		40
Home equity lines of credit serviced by others (1)	9		5		35		49		10		6		29		45
Automobile	104		20		36		160		127		32		35		194
Student	17		9		45		71		19		11		41		71
Credit cards	10		7		16		33		11		9		16		36
Other retail	9		2		3		14		8		4		5		17
Total retail	294		73		592		959		335		116		701		1,152
Total		$362		$80		$967		$1,409		$383		$124		$849		$1,356

⁽¹⁾ The Company’s SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

Schedule of impaired loans by class

The following is a summary of impaired loan information by class:

	March 31, 2016
(in millions)	Impaired Loans With a Related Allowance		Allowance on Impaired Loans		Impaired Loans Without a Related Allowance		Unpaid Contractual Balance		Total Recorded Investment in Impaired Loans
Commercial		$163		$30		$208		$414		$371
Commercial real estate	56		12		12		69		68
Total commercial	219		42		220		483		439
Residential mortgages (1)	35		4		111		183		146
Home equity loans (1)	55		6		84		165		139
Home equity lines of credit	25		3		165		227		190
Home equity loans serviced by others (2)	48		7		22		84		70
Home equity lines of credit serviced by others (2)	3		—		7		14		10
Automobile	3		—		11		19		14
Student	163		47		1		164		164
Credit cards	27		11		—		27		27
Other retail	13		4		2		17		15
Total retail	372		82		403		900		775
Total		$591		$124		$623		$1,383		$1,214

⁽¹⁾ Excluded from the table above are retail TDR principal balances held for sale with a total recorded investment of $373 million, including residential mortgages of $288 million and home equity loans of $85 million.

⁽²⁾ The Company’s SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

	December 31, 2015
(in millions)	Impaired Loans With a Related Allowance		Allowance on Impaired Loans		Impaired Loans Without a Related Allowance		Unpaid Contractual Balance		Total Recorded Investment in Impaired Loans
Commercial		$92		$23		$58		$144		$150
Commercial real estate	56		13		12		70		68
Total commercial	148		36		70		214		218
Residential mortgages	121		16		320		608		441
Home equity loans	85		11		139		283		224
Home equity lines of credit	27		2		167		234		194
Home equity loans serviced by others (1)	50		8		24		88		74
Home equity lines of credit serviced by others (1)	3		1		7		14		10
Automobile	3		—		11		19		14
Student	163		48		2		165		165
Credit cards	28		11		—		28		28
Other retail	13		4		2		18		15
Total retail	493		101		672		1,457		1,165
Total		$641		$137		$742		$1,671		$1,383

⁽¹⁾ The Company’s SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

Schedule of additional information on impaired loans

Additional information on impaired loans is as follows:

	Three Months Ended March 31,
	2016				2015
(in millions)	Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment
Commercial		$1		$201		$1		$142
Commercial real estate	—		66		—		51
Total commercial	1		267		1		193
Residential mortgages	1		142		4		441
Home equity loans	2		134		2		268
Home equity lines of credit	1		187		1		156
Home equity loans serviced by others (1)	1		71		1		88
Home equity lines of credit serviced by others (1)	—		10		—		11
Automobile	—		13		—		11
Student	2		163		2		164
Credit cards	—		27		1		30
Other retail	—		14		—		19
Total retail	7		761		11		1,188
Total		$8		$1,028		$12		$1,381

⁽¹⁾ The Company’s SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

Troubled debt restructurings on financing receivables

The following table summarizes how loans were modified during the three months endedMarch 31, 2016, the charge-offs related to the modifications, and the impact on the ALLL. The reported balances include loans that became TDRs during 2016 and were paid off in full, charged off, or sold prior to March 31, 2016.

	Primary Modification Types
	Interest Rate Reduction (1)					Maturity Extension (2)
(dollars in millions)	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial	5		$1		$1	26		$4		$4
Commercial real estate	—	—		—		—	—		—
Total commercial	5	1		1		26	4		4
Residential mortgages	22	3		3		6	1		1
Home equity loans	14	1		1		16	2		2
Home equity lines of credit	7	1		1		19	2		2
Home equity loans serviced by others (3)	3	—		—		—	—		—
Home equity lines of credit serviced by others (3)	—	—		—		1	—		—
Automobile	21	1		1		5	—		—
Student	—	—		—		—	—		—
Credit cards	529	3		3		—	—		—
Other retail	—	—		—		—	—		—
Total retail	596	9		9		47	5		5
Total	601		$10		$10	73		$9		$9

	Primary Modification Types
	Other (4)
(dollars in millions)	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Net Change to ALLL Resulting from Modification			Charge-offs Resulting from Modification
Commercial	5		$21		$20		($1	)		$18
Commercial real estate	—	—		—		—			—
Total commercial	5	21		20		(1		)	18
Residential mortgages	64	8		8		—			—
Home equity loans	87	6		6		—			—
Home equity lines of credit	32	2		2		—			—
Home equity loans serviced by others (3)	18	1		1		—			—
Home equity lines of credit serviced by others (3)	8	—		—		—			—
Automobile	191	3		3		—			—
Student	186	4		4		1			—
Credit cards	—	—		—		—			—
Other retail	3	—		—		—			—
Total retail	589	24		24		1			—
Total	594		$45		$44		$—			$18

⁽¹⁾ Includes modifications that consist of multiple concessions, one of which is an interest rate reduction.

⁽²⁾ Includes modifications that consist of multiple concessions, one of which is a maturity extension (unless one of the other concessions was an interest rate reduction).

⁽³⁾ The Company’s SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

⁽⁴⁾ Includes modifications other than interest rate reductions or maturity extensions, such as lowering scheduled payments for a specified period of time, principal forbearance, capitalizing arrearages, and principal forgiveness. Also included are the following: deferrals, trial modifications, certain bankruptcies, loans in forbearance and prepayment plans. Modifications can include the deferral of accrued interest resulting in post modification balances being higher than pre-modification.

The following table summarizes how loans were modified during the three months endedMarch 31, 2015, the charge-offs related to the modifications, and the impact on the ALLL. The reported balances include loans that became TDRs during 2015 and were paid off in full, charged off, or sold prior to March 31, 2015.

	Primary Modification Types
	Interest Rate Reduction (1)					Maturity Extension (2)
(dollars in millions)	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial	6		$1		$1	28		$10		$10
Commercial real estate	1	—		—		—	—		—
Total commercial	7	1		1		28	10		10
Residential mortgages	33	6		6		10	2		2
Home equity loans	21	1		1		37	5		5
Home equity lines of credit	—	—		—		3	—		—
Home equity loans serviced by others (3)	17	1		1		—	—		—
Automobile	20	1		1		1	—		—
Credit cards	604	3		3		—	—		—
Total retail	695	12		12		51	7		7
Total	702		$13		$13	79		$17		$17

	Primary Modification Types
	Other (4)
(dollars in millions)	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Net Change to ALLL Resulting from Modification			Charge-offs Resulting from Modification
Commercial	1		$2		$2		($1	)		$—
Commercial real estate	1	4		4		—			—
Total commercial	2	6		6		(1		)	—
Residential mortgages	64	6		6		(1		)	—
Home equity loans	197	10		10		—			—
Home equity lines of credit	135	8		7		—			1
Home equity loans serviced by others (3)	46	2		2		—			1
Home equity lines of credit serviced by others (3)	7	—		—		—			—
Automobile	297	5		4		—			1
Student	381	8		7		2			—
Other retail	11	—		—		—			—
Total retail	1,138	39		36		1			3
Total	1,140		$45		$42		$—			$3

⁽¹⁾ Includes modifications that consist of multiple concessions, one of which is an interest rate reduction.

⁽²⁾ Includes modifications that consist of multiple concessions, one of which is a maturity extension (unless one of the other concessions was an interest rate reduction).

⁽³⁾ The Company’s SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

⁽⁴⁾ Includes modifications other than interest rate reductions or maturity extensions, such as lowering scheduled payments for a specified period of time, principal forbearance, capitalizing arrearages, and principal forgiveness. Also included are the following: deferrals, trial modifications, certain bankruptcies, loans in forbearance and prepayment plans. Modifications can include the deferral of accrued interest resulting in post modification balances being higher than pre-modification.

Schedule of defaults

The table below summarizes TDRs that defaulted during the three months endedMarch 31, 2016 and 2015 within 12 months of their modification date. For purposes of this table, a payment default is defined as being past due 90 days or more under the modified terms. Amounts represent the loan’s recorded investment at the time of payment default. Loan data includes loans meeting the criteria that were paid off in full, charged off, or sold prior to March 31, 2016 and 2015. If a TDR of any loan type becomes 90 days past due after being modified, the loan is written down to the fair value of collateral less cost to sell. The amount written off is charged to the ALLL.

	Three Months Ended March 31,
	2016			2015
(dollars in millions)	Number of Contracts	Balance Defaulted		Number of Contracts	Balance Defaulted
Commercial	3		$—	6		$—
Commercial real estate	—	—		—	—
Total commercial	3	—		6	—
Residential mortgages	54	8		49	7
Home equity loans	49	3		51	3
Home equity lines of credit	25	3		40	2
Home equity loans serviced by others (1)	10	1		16	—
Home equity lines of credit serviced by others (1)	5	—		1	—
Automobile	15	—		23	—
Student	13	—		65	2
Credit cards	121	1		102	1
Other retail	—	—		2	—
Total retail	292	16		349	15
Total	295		$16	355		$15

⁽¹⁾ The Company’s SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

Schedule of loans that may increase credit exposure

The following table presents balances of loans with these characteristics:

	March 31, 2016
(in millions)	Residential Mortgages		Home Equity Loans and Lines of Credit		Home Equity Products Serviced by Others		Credit Cards		Student		Total
High loan-to-value		$519		$815		$695		$—		$—		$2,029
Interest only/negative amortization	1,181		—		—		—		1		1,182
Low introductory rate	—		—		—		93		—		93
Multiple characteristics and other	4		—		—		—		—		4
Total		$1,704		$815		$695		$93		$1		$3,308

	December 31, 2015
(in millions)	Residential Mortgages		Home Equity Loans and Lines of Credit		Home Equity Products Serviced by Others		Credit Cards		Student		Total
High loan-to-value		$649		$1,038		$785		$—		$—		$2,472
Interest only/negative amortization	1,110		—		—		—		—		1,110
Low introductory rate	—		3		—		96		—		99
Multiple characteristics and other	14		—		—		—		—		14
Total		$1,773		$1,041		$785		$96		$—		$3,695

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VARIABLE INTEREST ENTITIES (Tables)

3 Months Ended

Mar. 31, 2016

Equity Method Investments and Joint Ventures [Abstract]

Schedule of Variable Interest Entities

A summary of these investments is as follows:

(in millions)	March 31, 2016		December 31, 2015
LIHTC investment included in other assets		$642		$598
LIHTC unfunded commitments included in other liabilities	377		365
Renewable energy investments included in other assets	118		118

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MORTGAGE BANKING (Tables)

3 Months Ended

Mar. 31, 2016

Mortgage Banking [Abstract]

Schedule of valuation allowance for impairment of recognized servicing assets

Changes related to MSRs were as follows:

	As of and for the Three Months Ended March 31,
(in millions)	2016			2015
MSRs:
Balance as of January 1		$173			$184
Amount capitalized	5			6
Amortization	(9		)	(10		)
Carrying amount before valuation allowance	169			180
Valuation allowance for servicing assets:
Balance as of January 1	9			18
Valuation charge-offs (recoveries)	5			(1		)
Balance at end of period	14			17
Net carrying value of MSRs		$155			$163

Servicing asset at amortized cost

Changes related to MSRs were as follows:

	As of and for the Three Months Ended March 31,
(in millions)	2016			2015
MSRs:
Balance as of January 1		$173			$184
Amount capitalized	5			6
Amortization	(9		)	(10		)
Carrying amount before valuation allowance	169			180
Valuation allowance for servicing assets:
Balance as of January 1	9			18
Valuation charge-offs (recoveries)	5			(1		)
Balance at end of period	14			17
Net carrying value of MSRs		$155			$163

Schedule of fair value assumptions used to estimate the value of Mortgage Servicing Rights

The key economic assumptions used to estimate the value of MSRs are presented in the following table:

(dollars in millions)	March 31, 2016	December 31, 2015
Fair value	$168	$178
Weighted average life (in years)	4.9	5.4
Weighted average constant prepayment rate	13.3%	11.6%
Weighted average discount rate	9.7%	9.7%

Schedule of fair value assumptions used to estimate the value of Mortgage Servicing Rights capitalized in current period

The key economic assumptions used in estimating the fair value of MSRs capitalized during the period were as follows:

	Three Months Ended March 31,
	2016	2015
Weighted average life (in years)	6.1	4.7
Weighted average constant prepayment rate	11.0%	12.2%
Weighted average discount rate	9.8%	9.6%

Schedule of the impact to fair value of an adverse change in key economic assumptions

(in millions)	March 31, 2016		December 31, 2015
Prepayment rate:
Decline in fair value from a 50 basis point decrease in interest rates		$6		$5
Decline in fair value from a 100 basis point decrease in interest rates		$14		$11
Weighted average discount rate:
Decline in fair value from a 50 basis point increase in weighted average discount rate		$3		$3
Decline in fair value from a 100 basis point increase in weighted average discount rate		$5		$6

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BORROWED FUNDS (Tables)

3 Months Ended

Mar. 31, 2016

Debt Disclosure [Abstract]

Schedule of short-term borrowed funds

The following is a summary of the Company’s short-term borrowed funds:

(in millions)	March 31, 2016		December 31, 2015
Federal funds purchased		$23		$—
Securities sold under agreements to repurchase	691		802
Other short-term borrowed funds (primarily current portion of FHLB advances)	3,300		2,630
Total short-term borrowed funds		$4,014		$3,432

Key data related to short-term borrowed funds is presented in the following table:

(dollars in millions)	As of and for the Three Months Ended March 31, 2016			As of and for the Year Ended December 31, 2015
Weighted-average interest rate at period-end:
Federal funds purchased and securities sold under agreements to repurchase	0.01		%	0.15		%
Other short-term borrowed funds (primarily current portion of FHLB advances)	0.57			0.44
Maximum amount outstanding at month-end during the period:
Federal funds purchased and securities sold under agreements to repurchase		$1,274			$5,375
Other short-term borrowed funds (primarily current portion of FHLB advances)	3,300			7,004
Average amount outstanding during the period:
Federal funds purchased and securities sold under agreements to repurchase		$881			$3,364
Other short-term borrowed funds (primarily current portion of FHLB advances)	3,098			5,865
Weighted-average interest rate during the period:
Federal funds purchased and securities sold under agreements to repurchase	0.06		%	0.22		%
Other short-term borrowed funds (primarily current portion of FHLB advances)	0.58			0.28

Schedule of long-term borrowed funds

The following is a summary of the Company’s long-term borrowed funds:

(in millions)	March 31, 2016		December 31, 2015
Citizens Financial Group, Inc.:
4.150% fixed rate subordinated debt, due 2022 (1)		$347		$350
5.158% fixed-to-floating rate subordinated debt, (LIBOR + 3.56%) callable, due 2023 (2)	333		333
3.750% fixed rate subordinated debt, due 2024 (2) (3)	250		250
4.023% fixed rate subordinated debt, due 2024 (2) (4)	214		331
4.082% fixed rate subordinated debt, due 2025 (2) (5)	346		331
4.350% fixed rate subordinated debt, due 2025 (6)	248		250
4.300% fixed rate subordinated debt, due 2025 (7)	749		750
Banking Subsidiaries:
1.600% senior unsecured notes, due 2017 (8) (9)	752		749
2.300% senior unsecured notes, due 2018 (8) (10)	753		747
2.450% senior unsecured notes, due 2019 (8) (11)	763		752
2.500% senior unsecured notes, due 2019 (8)(12)	750		—
Federal Home Loan advances due through 2033	4,516		5,018
Other	14		25
Total long-term borrowed funds		$10,035		$9,886

⁽¹⁾ These balances are comprised of: principal balances of $350 million at March 31, 2016 and December 31, 2015, as well as the impact of ($3) million of unamortized deferred issuance costs and discount at March 31, 2016.

⁽²⁾ Borrowed funds with RBS. See Note 13 “Related Party Transactions and Significant Transactions with RBS” for further information.

⁽³⁾ Prior to January 1, 2016, interest was payable at a fixed rate per annum of 4.153%.

⁽⁴⁾ These balances are comprised of: principal balance of $208 million and $333 million at March 31, 2016 and December 31, 2015, respectively, as well as the impact from interest rate swaps of $6 million and ($2) million at March 31, 2016 and December 31, 2015, respectively. See Note 11 “Derivatives” for further information. In addition, on March 7, 2016, the Company repurchased $125 million of these securities from RBS. See Note 13 “Related Party Transactions and Significant Transactions with RBS” for further information.

⁽⁵⁾ These balances are comprised of: principal balance of $334 million at March 31, 2016 and December 31, 2015; impact from interest rate swaps of $12 million and ($3) million at March 31, 2016 and December 31, 2015, respectively. See Note 11 “Derivatives” for further information.

⁽⁶⁾ These balances are comprised of: principal balances of $250 million at March 31, 2016 and December 31, 2015, as well as the impact of ($2) million of unamortized deferred issuance costs and discount at March 31, 2016.

⁽⁷⁾ These balances are comprised of: principal balances of $750 million at March 31, 2016 and December 31, 2015, as well as the impact of ($1) million of unamortized deferred issuance costs and discount at March 31, 2016.

⁽⁸⁾ These securities were offered under CBNA’s Global Bank Note Program dated December 1, 2014.

⁽⁹⁾ These balances are comprised of: principal balances of $750 million at March 31, 2016 and December 31, 2015; impact from interest rate swaps of $3 million and ($1) million at March 31, 2016 and December 31, 2015, respectively; and ($1) million of unamortized deferred issuance costs and discount at March 31, 2016. See Note 11 “Derivatives” for further information.

⁽¹⁰⁾ These balances are comprised of: principal balances of $750 million at March 31, 2016 and December 31, 2015; impact from interest rate swaps of $6 million and ($3) million at March 31, 2016 and December 31, 2015, respectively; and ($3) million of unamortized deferred issuance costs and discount at March 31, 2016. See Note 11 “Derivatives” for further information.

⁽¹¹⁾ These balances are comprised of: principal balances of $750 million at March 31, 2016 and December 31, 2015; impact from interest rate swaps of $16 million and $2 million at March 31, 2016 and December 31, 2015, respectively; and ($3) million of unamortized deferred issuance costs and discount at March 31, 2016. See Note 11 “Derivatives” for further information.

⁽¹²⁾ The balance is comprised of: principal balance of $750 million at March 31, 2016; impact from interest rate swaps of $2 million and $(2) million of unamortized deferred issuance costs and discount at March 31, 2016. See Note 11 “Derivatives” for further information.

Schedule of maturities of long-term borrowed funds

The following is a summary of maturities for the Company’s long-term borrowed funds at March 31, 2016:

Year (in millions)	CFG Parent Company		Banking Subsidiaries		Consolidated
2017 or on demand		$—		$5,256		$5,256
2018	—		759		759
2019	—		1,514		1,514
2020	—		2		2
2021	—		5		5
2022 and thereafter	2,487		12		2,499
Total		$2,487		$7,548		$10,035

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EMPLOYEE BENEFITS (Tables)

3 Months Ended

Mar. 31, 2016

Compensation and Retirement Disclosure [Abstract]

Schedule of net periodic (income) cost

The following table presents the components of net periodic (income) cost for the Company’s qualified and non-qualified plans:

	Three Months Ended March 31,
	Qualified Plan						Non-Qualified Plan				Total
(in millions)	2016			2015			2016		2015		2016			2015
Service cost		$1			$1			$—		$—		$1			$1
Interest cost	11			11			1		1		12			12
Expected return on plan assets	(17		)	(18		)	—		—		(17		)	(18		)
Amortization of actuarial loss	4			3			—		1		4			4
Net periodic pension (income) cost		($1	)		($3	)		$1		$2		$—			($1	)

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DERIVATIVES (Tables)

3 Months Ended

Mar. 31, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of derivative instruments in consolidated balance sheets

The following table identifies derivative instruments included on the Consolidated Balance Sheets in derivative assets and derivative liabilities:

	March 31, 2016								December 31, 2015
(in millions)	Notional Amount (1)		Derivative Assets			Derivative Liabilities			Notional Amount (1)		Derivative Assets			Derivative Liabilities
Derivatives designated as hedging instruments:
Interest rate swaps		$14,000		$296			$167			$16,750		$96			$50
Derivatives not designated as hedging instruments:
Interest rate swaps	35,896		739			658			33,719		540			455
Foreign exchange contracts	8,928		146			138			8,366		163			156
Other contracts	1,117		11			8			981		8			5
Total derivatives not designated as hedging instruments			896			804					711			616
Gross derivative fair values			1,192			971					807			666
Less: Gross amounts offset in the Consolidated Balance Sheets (2)			(123		)	(123		)			(178		)	(178		)
Less: Cash collateral applied (2)			(1		)	(16		)			(4		)	(3		)
Total net derivative fair values presented in the Consolidated Balance Sheets (3)				$1,068			$832					$625			$485

⁽¹⁾ The notional or contractual amount of interest rate derivatives and foreign exchange contracts is the amount upon which interest and other payments under the contract are based. Notional amounts are typically not exchanged. Therefore, notional amounts should not be taken as the measure of credit or market risk, as they do not measure the true economic risk of these contracts.

⁽²⁾ Amounts represent the impact of legally enforceable master netting agreements that allow the Company to settle positive and negative positions.

⁽³⁾ The Company also offsets assets and liabilities associated with repurchase agreements on the Consolidated Balance Sheets. See Note 2 “Securities” for further information

Schedule of fair value hedges

The following table summarizes certain information related to the Company’s fair value hedges:

	The Effect of Fair Value Hedges on Net Income
	Amounts Recognized in Other Income for the
	Three Months Ended March 31, 2016							Three Months Ended March 31, 2015
(in millions)	Derivative		Hedged Item			Hedge Ineffectiveness		Derivative		Hedged Item			Hedge Ineffectiveness
Hedges of interest rate risk on borrowings using interest rate swaps		$52		($52	)		$—		$9		($9	)		$—

Schedule of effect of cash flow hedges on net income and stockholders' equity

The following table summarizes certain information related to the Company’s cash flow hedges:

The Effect of Cash Flow Hedges on Net Income and Stockholders' Equity
	Amounts Recognized for the Three Months Ended March 31,
(in millions)	2016			2015
Effective portion of gain recognized in OCI (1)		$54			$104
Amounts reclassified from OCI to interest income (2)	22			18
Amounts reclassified from OCI to interest expense (2)	(8		)	(15		)
Ineffective portion of gain recognized in other income (3)	—			1

⁽¹⁾ The cumulative effective gains and losses on the Company’s cash flow hedging activities are included on the accumulated other comprehensive loss line item on the Consolidated Balance Sheets.

⁽²⁾ This amount includes both (a) the amortization of effective gains and losses associated with the Company’s terminated cash flow hedges and (b) the current reporting period’s interest settlements realized on the Company’s active cash flow hedges. Both (a) and (b) were previously included on the accumulated other comprehensive loss line item on the Consolidated Balance Sheets and were subsequently recorded as adjustments to the interest expense of the underlying hedged item.

⁽³⁾This amount represents the net ineffectiveness recorded during the reporting periods presented plus any amounts excluded from effectiveness testing. These amounts are reflected in the other income line item on the Consolidated Statements of Operations.

Schedule of effect of derivative Instruments on net income

The following table summarizes certain information related to the Company’s customer derivatives and economic hedges:

The Effect of Customer Derivatives and Economic Hedges on Net Income
	Amounts Recognized in Noninterest Income for the Three Months Ended March 31,
(in millions)	2016			2015
Customer derivative contracts
Customer interest rate contracts (1)		$97			$73
Customer foreign exchange contracts (1)	51			(35		)
Residential loan commitments (2)	4			—
Economic hedges
Offsetting derivatives transactions to hedge interest rate risk on customer interest rate contracts (1)	(91		)	(68		)
Offsetting derivatives transactions to hedge foreign exchange risk on customer foreign exchange contracts (3)	(50		)	35
Forward sale contracts (2)	(5		)	(1		)
Total		$6			$4

⁽¹⁾ Reported in other income on the Consolidated Statements of Operations.

⁽²⁾ Reported in mortgage banking fees on the Consolidated Statements of Operations.

⁽³⁾ Reported in foreign exchange and letter of credit fees on the Consolidated Statements of Operations.

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COMMITMENTS AND CONTINGENCIES (Tables)

3 Months Ended

Mar. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

Schedule of outstanding off balance sheet arrangements

The following is a summary of outstanding off-balance sheet arrangements:

(in millions)	March 31, 2016		December 31, 2015
Commitment amount:
Undrawn commitments to extend credit		$56,989		$56,524
Financial standby letters of credit	1,921		2,010
Performance letters of credit	41		42
Commercial letters of credit	63		87
Marketing rights	47		47
Risk participation agreements	53		26
Residential mortgage loans sold with recourse	10		10
Total		$59,124		$58,746

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RELATED PARTY TRANSACTIONS AND SIGNIFICANT TRANSACTIONS WITH RBS (Tables)

3 Months Ended

Mar. 31, 2016

Related Party Transactions [Abstract]

Schedule of inter-company borrowed funds

The following is a summary of borrowed funds from RBS:

	Interest Rate			Maturity Date	March 31, 2016	December 31, 2015
(dollars in millions)
Subordinated debt	5.158	%		June 2023	$333		$333
	3.750	%	(1)	July 2024	250	250
	4.023	%	(2)	October 2024	208	333
	4.082	%		January 2025	334	334

⁽¹⁾ Prior to January 1, 2016, interest was payable at a fixed rate per annum of 4.153%.

⁽²⁾ On March 7, 2016, the Company repurchased $125 million of these securities from RBS.

Schedule of related party transactions, recorded interest expense

The following table presents total interest expense recorded on subordinated debt with RBS:

	Three Months Ended March 31,
(in millions)	2016		2015
Interest expense on subordinated debt		$11		$20

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FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Mar. 31, 2016

Fair Value Disclosures [Abstract]

Summary of difference between aggregated fair value and unpaid principal balance of loans held for sale

The following table summarizes the difference between the aggregate fair value and the aggregate unpaid principal balance loans held for sale measured at fair value:

	March 31, 2016						December 31, 2015
(in millions)	Aggregate Fair Value		Aggregate Unpaid Principal		Aggregate Fair Value Less Aggregate Unpaid Principal		Aggregate Fair Value		Aggregate Unpaid Principal		Aggregate Fair Value Less Aggregate Unpaid Principal
Residential mortgage loans held for sale, at fair value		$292		$281		$11		$268		$263		$5
Commercial and commercial real estate loans held for sale, at fair value	73		73		—		57		57		—

Assets and liabilities measured on recurring basis

The following table presents assets and liabilities measured at fair value, including gross derivative assets and liabilities on a recurring basis at March 31, 2016:

(in millions)	Total		Level 1		Level 2		Level 3
Securities available for sale:
Mortgage-backed securities		$17,922		$—		$17,922		$—
State and political subdivisions	9		—		9		—
Equity securities	17		—		17		—
U.S. Treasury and other	16		15		1		—
Total securities available for sale	17,964		15		17,949		—
Loans held for sale, at fair value:
Residential loans held for sale	292		—		292		—
Commercial loans held for sale	73		—		73		—
Total loans held for sale, at fair value	365		—		365		—
Derivative assets:
Interest rate swaps	1,035		—		1,035		—
Foreign exchange contracts	146		—		146		—
Other contracts	11		—		11		—
Total derivative assets	1,192		—		1,192		—
Other investment securities, at fair value:
Money market mutual fund	63		63		—		—
Other investments	5		—		5		—
Total other investment securities, at fair value	68		63		5		—
Total assets		$19,589		$78		$19,511		$—
Derivative liabilities:
Interest rate swaps		$825		$—		$825		$—
Foreign exchange contracts	138		—		138		—
Other contracts	8		—		8		—
Total derivative liabilities	971		—		971		—
Total liabilities		$971		$—		$971		$—

The following table presents assets and liabilities measured at fair value including gross derivative assets and liabilities on a recurring basis at December 31, 2015:

(in millions)	Total		Level 1		Level 2		Level 3
Securities available for sale:
Mortgage-backed securities		$17,842		$—		$17,842		$—
State and political subdivisions	9		—		9		—
Equity securities	17		—		17		—
U.S. Treasury	16		15		1		—
Total securities available for sale	17,884		15		17,869		—
Loans held for sale, at fair value:
Residential loans held for sale	268		—		268		—
Commercial loans held for sale	57		—		57		—
Total loans held for sale, at fair value	325		—		325		—
Derivative assets:
Interest rate swaps	636		—		636		—
Foreign exchange contracts	163		—		163		—
Other contracts	8		—		8		—
Total derivative assets	807		—		807		—
Other investment securities, at fair value:
Money market mutual fund	65		65		—		—
Other investments	5		—		5		—
Total other investment securities, at fair value	70		65		5		—
Total assets		$19,086		$80		$19,006		$—
Derivative liabilities:
Interest rate swaps		$505		$—		$505		$—
Foreign exchange contracts	156		—		156		—
Other contracts	5		—		5		—
Total derivative liabilities	666		—		666		—
Total liabilities		$666		$—		$666		$—

The changes in Level 3 assets measured at fair value on a recurring basis are summarized as follows:

	Three Months Ended March 31,
(in millions)	2016		2015
Beginning as of January 1		$—		$5
Purchases, issuances, sales and settlements:
Purchases	—		1
Sales	—		—
Settlements	—		—
Net (losses) gains	—		—
Transfers from Level 3 to Level 2	—		(5		)
Balance as of March 31		$—		$1
Net unrealized gain (loss) included in net income for the year relating to assets held at period end		$—		$1

Gains (losses) on assets and liabilities measured on a nonrecurring basis included in earnings

The following table presents gains (losses) on assets and liabilities measured at fair value on a nonrecurring basis and recorded in earnings:

	Three Months Ended March 31,
(in millions)	2016			2015
Impaired collateral-dependent loans		($5	)		($3	)
MSRs	(5		)	1
Foreclosed assets	(1		)	(1		)

Fair value of assets and liabilities measured on a nonrecurring basis

The following table present assets and liabilities measured at fair value on a nonrecurring basis:

	March 31, 2016								December 31, 2015
(in millions)	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Impaired collateral-dependent loans		$39		$—		$39		$—		$60		$—		$60		$—
MSRs	168		—		—		168		178		—		—		178
Foreclosed assets	46		—		46		—		42		—		42		—

Assets and liabilities measured at fair value

The following table is a summary of fair value for financial instruments not recorded at fair value in the unaudited interim Consolidated Financial Statements. The carrying amounts in the following table are recorded in the Consolidated Balance Sheets under the indicated captions:

	March 31, 2016
	Total				Level 1				Level 2				Level 3
(in millions)	Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value
Financial Assets:
Securities held to maturity		$5,129		$5,261		$—		$—		$5,129		$5,261		$—		$—
Other investment securities, at cost	896		896		—		—		896		896		—		—
Other loans held for sale	386		386		—		—		—		—		386		386
Loans and leases	100,991		101,475		—		—		39		39		100,952		101,436
Financial Liabilities:
Deposits	102,606		102,606		—		—		102,606		102,606		—		—
Federal funds purchased and securities sold under agreements to repurchase	714		714		—		—		714		714		—		—
Other short-term borrowed funds	3,300		3,300		—		—		3,300		3,300		—		—
Long-term borrowed funds	10,035		10,142		—		—		10,035		10,142		—		—

	December 31, 2015
	Total				Level 1				Level 2				Level 3
(in millions)	Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value
Financial Assets:
Securities held to maturity		$5,258		$5,297		$—		$—		$5,258		$5,297		$—		$—
Other investment securities, at cost	863		863		—		—		863		863		—		—
Other loans held for sale	40		40		—		—		—		—		40		40
Loans and leases	99,042		99,026		—		—		60		60		98,982		98,966
Financial Liabilities:
Deposits	102,539		102,528		—		—		102,539		102,528		—		—
Federal funds purchased and securities sold under agreements to repurchase	802		802		—		—		802		802		—		—
Other short-term borrowed funds	2,630		2,630		—		—		2,630		2,630		—		—
Long-term borrowed funds	9,886		9,837		—		—		9,886		9,837		—		—

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REGULATORY MATTERS (Tables)

3 Months Ended

Mar. 31, 2016

Banking and Thrift [Abstract]

Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations

The following table presents our capital and capital ratios under Basel III Transitional rules as of March 31, 2016 and December 31, 2015. Certain Basel III requirements are subject to phase-in through 2019, and these phase-in rules are used in this report of actual regulatory ratios. In addition, the Company has declared itself as an “AOCI opt-out” institution, which means that the Company will not be required to change its methodology for recognizing in regulatory capital only a subset of unrealized gains and losses that are classified as AOCI. As an AOCI opt-out institution, the Company is not required to recognize within regulatory capital the impacts of net unrealized gains and losses on securities AFS, accumulated net gains and losses on cash-flow hedges included in AOCI, net gains and losses on certain defined benefit pension plan assets, and net unrealized gains and losses on securities held to maturity that are included in AOCI.

	Transitional Basel III
									FDIA Requirements
	Actual				Minimum Capital Adequacy				Classification as Well-capitalized
(dollars in millions)	Amount		Ratio		Amount		Ratio		Amount		Ratio
As of March 31, 2016
Common equity tier 1 capital (1) (5)		$13,570	11.6	%		$5,975	5.125	%		$7,578	6.5	%
Tier 1 capital (2) (5)	13,817		11.9		7,724		6.625		9,327		8.0
Total capital (3)(5)	17,587		15.1		10,056		8.625		11,659		10.0
Tier 1 leverage (4)	13,817		10.4		5,318		4.000		6,648		5.0
As of December 31, 2015
Common equity tier 1 capital (1)		$13,389	11.7	%		$5,134	4.5	%		$7,415	6.5	%
Tier 1 capital (2)	13,636		12.0		6,845		6.0		9,127		8.0
Total capital (3)	17,505		15.3		9,127		8.0		11,408		10.0
Tier 1 leverage (4)	13,636		10.5		5,218		4.0		6,523		5.0

⁽¹⁾ “Common equity tier 1 capital ratio” represents CET1 divided by total risk-weighted assets as defined under Basel III Standardized approach.

⁽²⁾ “Tier 1 capital ratio” is tier 1 capital, which includes CET1 capital plus non-cumulative perpetual preferred equity that qualifies as additional tier 1 capital, divided by total risk-weighted assets as defined under Basel III Standardized approach.

⁽³⁾ “Total capital ratio” is total capital divided by total risk-weighted assets as defined under Basel III Standardized approach.

⁽⁴⁾ “Tier 1 leverage ratio” is tier 1 capital divided by quarterly average total assets as defined under Basel III Standardized approach.

⁽⁵⁾ “Minimum Capital ratio” for 2016 includes capital conservation buffer of .625%.

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EXIT COSTS AND RESTRUCTURING RESERVES (Tables)

3 Months Ended

Mar. 31, 2016

Restructuring and Related Activities [Abstract]

Schedule of restructuring and related costs

The following table includes the activity in the exit costs and restructuring reserves:

(in millions)	Salaries & Employee Benefits			Occupancy & Equipment			Other			Total
Reserve balance as of January 1, 2015		$23			$18			$3			$44
Additions	5			18			8			31
Reversals	(4		)	(1		)	—			(5		)
Utilization	(12		)	(19		)	(6		)	(37		)
Reserve balance as of December 31, 2015	12			16			5			33
Utilization	(2		)	(2		)	(5		)	(9		)
Reserve balance as of March 31, 2016		$10			$14			$—			$24

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RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables)

3 Months Ended

Mar. 31, 2016

Equity [Abstract]

Schedule of other comprehensive income

The following table presents the changes in the balances, net of income taxes, of each component of AOCI:

(in millions)	Net Unrealized Gains (Losses) on Derivatives			Net Unrealized Gains (Losses) on Securities			Defined Benefit Pension Plans			Total AOCI
Balance at January 1, 2015		($69	)		$74			($377	)		($372	)
Other comprehensive income before reclassifications	65			90			—			155
Other-than-temporary impairment not recognized in earnings on securities	—			(19		)	—			(19		)
Amounts reclassified from other comprehensive (loss) income	(2		)	(4		)	2			(4		)
Net other comprehensive income	63			67			2			132
Balance at March 31, 2015		($6	)		$141			($375	)		($240	)
Balance at January 1, 2016		$10			($28	)		($369	)		($387	)
Other comprehensive income before reclassifications	33			154			—			187
Other-than-temporary impairment not recognized in earnings on securities	—			(25		)	—			(25		)
Amounts reclassified from other comprehensive (loss) income	(8		)	(5		)	2			(11		)
Net other comprehensive income	25			124			2			151
Balance at March 31, 2016		$35			$96			($367	)		($236	)

Schedule of reclassification out of accumulated other comprehensive income

The following table reports the amounts reclassified out of each component of AOCI and into the Consolidated Statements of Operations:

	Three Months Ended March 31,
(in millions)	2016			2015
Details about AOCI Components							Affected Line Item in the Consolidated Statements of Operations
Reclassification adjustment for net derivative gains (losses) included in net income:		$22			$18		Interest income
	(8		)	(15		)	Interest expense
	14			3			Income before income tax expense
	6			1			Income tax expense
		$8			$2		Net income
Reclassification of net securities gains (losses) to net income:		$9			$8		Securities gains, net
	(1		)	(1		)	Net securities impairment losses recognized in earnings
	8			7			Income before income tax expense
	3			3			Income tax expense
		$5			$4		Net income
Reclassification of changes related to defined benefit pension plans:		($4	)		($3	)	Salaries and employee benefits
	(4		)	(3		)	Income before income tax expense
	(2		)	(1		)	Income tax expense
		($2	)		($2	)	Net income
Total reclassification gains (losses)		$11			$4		Net income

The following table presents the effects to net income of the amounts reclassified out of AOCI:

	Three Months Ended March 31,
(in millions)	2016		2015
Net interest income (includes $14 and $3 of AOCI reclassifications, respectively)		$904		$836
Provision for credit losses	91		58
Noninterest income (includes $8 and $7 of AOCI reclassifications, respectively)	330		347
Noninterest expense (includes $4 and $3 of AOCI reclassifications, respectively)	811		810
Income before income tax expense	332		315
Income tax expense (includes $7 and $3 income tax net expense (benefit) from reclassification items, respectively)	109		106
Net income		$223		$209

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BUSINESS SEGMENTS (Tables)

3 Months Ended

Mar. 31, 2016

Segment Reporting [Abstract]

Schedule of segment reporting information

	As of and for the Three Months Ended March 31, 2016
(in millions)	Consumer Banking		Commercial Banking		Other		Consolidated
Net interest income		$581		$300		$23		$904
Noninterest income	208		99		23		330
Total revenue	789		399		46		1,234
Noninterest expense	616		187		8		811
Profit before provision for credit losses	173		212		38		423
Provision for credit losses	63		9		19		91
Income before income tax expense	110		203		19		332
Income tax expense	39		70		—		109
Net income		$71		$133		$19		$223
Total average assets		$55,116		$45,304		$38,360		$138,780

	As of and for the Three Months Ended March 31, 2015
(in millions)	Consumer Banking		Commercial Banking			Other			Consolidated
Net interest income		$533		$276			$27			$836
Noninterest income	219		100			28			347
Total revenue	752		376			55			1,183
Noninterest expense	596		173			41			810
Profit before provision for credit losses	156		203			14			373
Provision for credit losses	63		(21		)	16			58
Income (loss) before income tax expense (benefit)	93		224			(2		)	315
Income tax expense (benefit)	32		77			(3		)	106
Net income		$61		$147			$1			$209
Total average assets		$51,602		$41,606			$40,117			$133,325

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EARNINGS PER SHARE (Tables)

3 Months Ended

Mar. 31, 2016

Earnings Per Share [Abstract]

Schedule of earnings per share

	Three Months Ended March 31,
(dollars in millions, except share and per-share data)	2016		2015
Numerator (basic and diluted):
Net income		$223		$209
Less: Preferred stock dividends	7		—
Net income available to common stockholders		$216		$209
Denominator:
Weighted-average common shares outstanding - basic	528,070,648		546,291,363
Dilutive common shares: share-based awards	2,375,540		3,507,354
Weighted-average common shares outstanding - diluted	530,446,188		549,798,717
Earnings per common share:
Basic		$0.41		$0.38
Diluted	0.41		0.38

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OTHER OPERATING EXPENSE (Tables)

3 Months Ended

Mar. 31, 2016

Other Income and Expenses [Abstract]

Schedule of other operating expense

The following table presents the details of other operating expense:

	Three Months Ended March 31,
(in millions)	2016		2015
Deposit insurance		$26		$34
Promotional expense	24		22
Postage and delivery	12		12
Other	53		65
Other operating expense		$115		$133

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SECURITIES - Narrative (Details) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015	Dec. 31, 2014
Schedule of Available-for-sale Securities [Line Items]
Securities impairment	$ 1,000,000	$ 1,000,000
Impaired debt securities sold	0	0
Pretax non-credit related losses were deferred in OCI	40,000,000	30,000,000
Available-for-sale Securities
Schedule of Available-for-sale Securities [Line Items]
Cumulative credit losses recognized in earnings	66,000,000	62,000,000	$ 66,000,000	$ 62,000,000
Reductions due to increases in cash flow expectations on impaired securities	1,000,000	1,000,000
Held-to-maturity Securities
Schedule of Available-for-sale Securities [Line Items]
Cumulative credit losses recognized in earnings	0	0
Mortgage-backed securities
Schedule of Available-for-sale Securities [Line Items]
Proceeds from Securitizations of Loans Held-for-sale	$ 0	$ 18,000,000

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SECURITIES - Schedule of Investments (Details) - USD ($) $ in Millions		Mar. 31, 2016	Dec. 31, 2015
Schedule of Available-for-sale and Held-to-maturity Securities [Line Items]
Securities Available-for-sale, Amortized Cost		$ 17,715	$ 17,831
Securities Available-for-sale, Gross Unrealized Gains		302	157
Securities Available-for-sale, Gross Unrealized Losses		(53)	(104)
Securities Available-for-sale, Fair Value	[1]	17,964	17,884
Securities Held-to-maturity, Amortized Cost	[1]	5,129	5,258
Securities Held-to-maturity, Gross Unrealized Gain		132	50
Securities Held-to-maturity, Gross Unrealized Losses		0	(11)
Securities held-to-maturity, Fair Value		5,261	5,297
Money market mutual fund, Amortized Cost		63	65
Money market mutual fund, Gross Unrealized Gains		0	0
Money market mutual fund, Gross Unrealized Losses		0	0
Money market mutual fund, Fair Value		63	65
Total other investment securities, at fair value, Amortized Cost		68	70
Total other investments securities, at fair value, at cost, Gross Unrealized Gains		0	0
Total other investments securities, at fair value, Gross Unrealized Losses		0	0
Total other investment securities, at fair value, Fair Value		68	70
Total other investment securities, at cost		896	863
Total other investment securities, at cost, Gross Unrealized Gain		0	0
Total other investment securities, at cost, Gross Unrealized Losses		0	0
Total other investment securities, at cost, Fair Value		896	863
U.S. Treasury and other
Schedule of Available-for-sale and Held-to-maturity Securities [Line Items]
Debt Securities Available-for-sale, Amortized Cost		16	16
Debt Securities Available-for-sale, Gross Unrealized Gains		0	0
Debt Securities Available-for-sale, Gross Unrealized Losses		0	0
Debt Securities Available-for-sale, Fair Value		16	16
State and political subdivisions
Schedule of Available-for-sale and Held-to-maturity Securities [Line Items]
Debt Securities Available-for-sale, Amortized Cost		9	9
Debt Securities Available-for-sale, Gross Unrealized Gains		0	0
Debt Securities Available-for-sale, Gross Unrealized Losses		0	0
Debt Securities Available-for-sale, Fair Value		9	9
Federal agencies and U.S. government sponsored entities
Schedule of Available-for-sale and Held-to-maturity Securities [Line Items]
Debt Securities Available-for-sale, Amortized Cost		17,147	17,234
Debt Securities Available-for-sale, Gross Unrealized Gains		300	153
Debt Securities Available-for-sale, Gross Unrealized Losses		(13)	(67)
Debt Securities Available-for-sale, Fair Value		17,434	17,320
Securities Held-to-maturity, Amortized Cost		4,010	4,105
Securities Held-to-maturity, Gross Unrealized Gain		93	27
Securities Held-to-maturity, Gross Unrealized Losses		0	(11)
Securities held-to-maturity, Fair Value		4,103	4,121
Other/non-agency
Schedule of Available-for-sale and Held-to-maturity Securities [Line Items]
Debt Securities Available-for-sale, Amortized Cost		526	555
Debt Securities Available-for-sale, Gross Unrealized Gains		2	4
Debt Securities Available-for-sale, Gross Unrealized Losses		(40)	(37)
Debt Securities Available-for-sale, Fair Value		488	522
Securities Held-to-maturity, Amortized Cost		1,119	1,153
Securities Held-to-maturity, Gross Unrealized Gain		39	23
Securities Held-to-maturity, Gross Unrealized Losses		0	0
Securities held-to-maturity, Fair Value		1,158	1,176
Total mortgage-backed securities
Schedule of Available-for-sale and Held-to-maturity Securities [Line Items]
Debt Securities Available-for-sale, Amortized Cost		17,673	17,789
Debt Securities Available-for-sale, Gross Unrealized Gains		302	157
Debt Securities Available-for-sale, Gross Unrealized Losses		(53)	(104)
Debt Securities Available-for-sale, Fair Value		17,922	17,842
Total debt securities available for sale
Schedule of Available-for-sale and Held-to-maturity Securities [Line Items]
Debt Securities Available-for-sale, Amortized Cost		17,698	17,814
Debt Securities Available-for-sale, Gross Unrealized Gains		302	157
Debt Securities Available-for-sale, Gross Unrealized Losses		(53)	(104)
Debt Securities Available-for-sale, Fair Value		17,947	17,867
Marketable equity securities
Schedule of Available-for-sale and Held-to-maturity Securities [Line Items]
Equity Securities Available-for-sale, Amortized Cost		5	5
Equity Securities Available-for-sale, Gross Unrealized Gains		0	0
Equity Securities Available-for-sale, Gross Unrealized Losses		0	0
Equity Securities Available-for-sale, Fair Value		5	5
Other equity securities
Schedule of Available-for-sale and Held-to-maturity Securities [Line Items]
Equity Securities Available-for-sale, Amortized Cost		12	12
Equity Securities Available-for-sale, Gross Unrealized Gains		0	0
Equity Securities Available-for-sale, Gross Unrealized Losses		0	0
Equity Securities Available-for-sale, Fair Value		12	12
Total equity securities available for sale
Schedule of Available-for-sale and Held-to-maturity Securities [Line Items]
Equity Securities Available-for-sale, Amortized Cost		17	17
Equity Securities Available-for-sale, Gross Unrealized Gains		0	0
Equity Securities Available-for-sale, Gross Unrealized Losses		0	0
Equity Securities Available-for-sale, Fair Value		17	17
Other investments
Schedule of Available-for-sale and Held-to-maturity Securities [Line Items]
Other Investments, Amortized Cost		5	5
Other Investments, Gross Unrealized Gain		0	0
Other Investments, Gross Unrealized Loss		0	0
Other Investments, Fair Value		5	5
Federal Reserve Bank stock
Schedule of Available-for-sale and Held-to-maturity Securities [Line Items]
Federal Reserve Bank stock, Amortized Cost		468	468
Federal Reserve Bank stock, Gross Unrealized Gains		0	0
Federal Reserve Bank stock, Gross Unrealized Loss		0	0
Federal Reserve Bank stock, Fair Value		468	468
Federal Home Loan Bank stock
Schedule of Available-for-sale and Held-to-maturity Securities [Line Items]
Federal Home Loan Bank stock, Amortized Cost		428	395
Federal Home Loan Bank stock, Gross Unrealized Gain		0	0
Federal Home Loan Bank stock, Gross Unrealized Loss		0	0
Federal Home Loan Bank stock, Fair Value		$ 428	$ 395

[1] Includes only collateral pledged by the Company where counterparties have the right to sell or pledge the collateral.

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SECURITIES - Other than temporary impairment recognized in earnings (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Investments, Debt and Equity Securities [Abstract]
Total other-than-temporary impairment losses	$ (41)	$ (31)
Portions of loss recognized in other comprehensive income (before taxes)	40	30
Net securities impairment losses recognized in earnings	$ (1)	$ (1)

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SECURITIES - Schedule of Investments in Continuous Loss Positions (Details) $ in Millions	Mar. 31, 2016 USD ($) Securities	Dec. 31, 2015 USD ($) Securities
Schedule of Available-for-sale Securities [Line Items]
Securities Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Number of Issues | Securities	22	166
Securities Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Fair Value	$ 642	$ 7,456
Securities Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Gross Unrealized Loss	$ (1)	$ (51)
Securities Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Number of Issues | Securities	53	56
Securities Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Fair Value	$ 1,071	$ 1,180
Securities Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Gross Unrealized Loss	$ (52)	$ (64)
Securities Available-for-sale, Continuous Unrealized Loss Position, Number of Issues | Securities	75	222
Securities Available-for-sale, Continuous Unrealized Loss Position, Fair Value	$ 1,713	$ 8,636
Securities Available-for-sale, Continuous Unrealized Loss Position, Gross Unrealized Loss	$ (53)	$ (115)
State and political subdivisions
Schedule of Available-for-sale Securities [Line Items]
Securities Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Number of Issues | Securities		1
Securities Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Fair Value		$ 9
Securities Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Gross Unrealized Loss		$ 0
Securities Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Number of Issues | Securities		0
Securities Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Fair Value		$ 0
Securities Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Gross Unrealized Loss		$ 0
Securities Available-for-sale, Continuous Unrealized Loss Position, Number of Issues | Securities		1
Securities Available-for-sale, Continuous Unrealized Loss Position, Fair Value		$ 9
Securities Available-for-sale, Continuous Unrealized Loss Position, Gross Unrealized Loss		$ 0
U.S. Treasury and other
Schedule of Available-for-sale Securities [Line Items]
Securities Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Number of Issues | Securities	1	1
Securities Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Fair Value	$ 9	$ 15
Securities Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Gross Unrealized Loss	$ 0	$ 0
Securities Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Number of Issues | Securities	0	0
Securities Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Fair Value	$ 0	$ 0
Securities Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Gross Unrealized Loss	$ 0	$ 0
Securities Available-for-sale, Continuous Unrealized Loss Position, Number of Issues | Securities	1	1
Securities Available-for-sale, Continuous Unrealized Loss Position, Fair Value	$ 9	$ 15
Securities Available-for-sale, Continuous Unrealized Loss Position, Gross Unrealized Loss	$ 0	$ 0
Federal agencies and U.S. government sponsored entities
Schedule of Available-for-sale Securities [Line Items]
Securities Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Number of Issues | Securities	15	162
Securities Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Fair Value	$ 614	$ 7,423
Securities Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Gross Unrealized Loss	$ (1)	$ (51)
Securities Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Number of Issues | Securities	33	36
Securities Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Fair Value	$ 727	$ 819
Securities Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Gross Unrealized Loss	$ (12)	$ (27)
Securities Available-for-sale, Continuous Unrealized Loss Position, Number of Issues | Securities	48	198
Securities Available-for-sale, Continuous Unrealized Loss Position, Fair Value	$ 1,341	$ 8,242
Securities Available-for-sale, Continuous Unrealized Loss Position, Gross Unrealized Loss	$ (13)	$ (78)
Other/non-agency
Schedule of Available-for-sale Securities [Line Items]
Securities Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Number of Issues | Securities	6	2
Securities Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Fair Value	$ 19	$ 9
Securities Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Gross Unrealized Loss	$ 0	$ 0
Securities Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Number of Issues | Securities	20	20
Securities Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Fair Value	$ 344	$ 361
Securities Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Gross Unrealized Loss	$ (40)	$ (37)
Securities Available-for-sale, Continuous Unrealized Loss Position, Number of Issues | Securities	26	22
Securities Available-for-sale, Continuous Unrealized Loss Position, Fair Value	$ 363	$ 370
Securities Available-for-sale, Continuous Unrealized Loss Position, Gross Unrealized Loss	$ (40)	$ (37)
Total mortgage-backed securities
Schedule of Available-for-sale Securities [Line Items]
Securities Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Number of Issues | Securities	21	164
Securities Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Fair Value	$ 633	$ 7,432
Securities Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Gross Unrealized Loss	$ (1)	$ (51)
Securities Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Number of Issues | Securities	53	56
Securities Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Fair Value	$ 1,071	$ 1,180
Securities Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Gross Unrealized Loss	$ (52)	$ (64)
Securities Available-for-sale, Continuous Unrealized Loss Position, Number of Issues | Securities	74	220
Securities Available-for-sale, Continuous Unrealized Loss Position, Fair Value	$ 1,704	$ 8,612
Securities Available-for-sale, Continuous Unrealized Loss Position, Gross Unrealized Loss	$ (53)	$ (115)

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SECURITIES - Schedule of Cumulative Credit Losses Recognized in Earnings (Details) - Available-for-sale Securities - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Roll Forward]
Cumulative balance at beginning of period	$ 66	$ 62
Credit impairments recognized in earnings on securities that have been previously impaired	1	1
Reductions due to increases in cash flow expectations on impaired securities	(1)	(1)
Cumulative balance at end of period	$ 66	$ 62

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SECURITIES - Schedule of Available for Sale Securities Debt Maturities (Details) $ in Millions	Mar. 31, 2016 USD ($)
Available-for-sale Securities and Held-to-maturity Securities, Debt Maturities, Amortized Cost Basis [Abstract]
Amortized Cost, Debt securities available for sale, Maturity of 1 Year or Less	$ 30
Amortized Cost, Debt securities available for sale, Maturity of 1-5 Years	94
Amortized Cost, Debt securities available for sale, Maturity of 5-10 Years	1,794
Amortized Cost, Debt securities available for sale, Maturity After 10 Years	15,780
Amortized Cost, Debt securities available for sale, Total	17,698
Amortized Cost, Debt securities held to maturity, Maturity of 1 Year or Less	0
Amortized Cost, Debt securities held to maturity, Maturity of 1-5 Years	0
Amortized Cost, Debt securities held to maturity, Maturity of 5-10 Years	0
Amortized Cost, Debt securities held to maturity, Maturity After 10 Years	5,129
Amortized Cost, Debt securities held to maturity, Total	5,129
Total amortized cost of debt securities, Maturity of 1 Year or Less	30
Total amortized cost of debt securities, Maturity of 1-5 Years	94
Total amortized cost of debt securities, Maturity of 5-10 Years	1,794
Total amortized cost of debt securities, Maturity After 10 Years	20,909
Total amortized cost of debt securities, Total	22,827
Available-for-sale Securities and Held-to-maturity Securities, Debt Maturities, Fair Value [Abstract]
Fair Value, Debt securities available for sale, Maturity of 1 Year or Less	30
Fair Value, Debt securities available for sale, Maturity of 1-5 Years	96
Fair Value, Debt securities available for sale, Maturity of 5-10 Years	1,827
Fair Value, Debt securities available for sale, Maturity After 10 Years	15,994
Fair Value, Debt securities available for sale, Total	17,947
Fair Value, Debt securities held to maturity, Maturity of 1 Year or Less	0
Fair Value, Debt securities held to maturity, Maturity of 1-5 Years	0
Fair Value, Debt securities held to maturity, Maturity of 5-10 Years	0
Fair Value, Debt securities held to maturity, Maturity After 10 Years	5,261
Fair Value, Debt securities held to maturity, Total	5,261
Total fair value of debt securities, Maturity of 1 Year or Less	30
Total fair value of debt securities, Maturity of 1-5 Years	96
Total fair value of debt securities, Maturity of 5-10 Years	1,827
Total fair value of debt securities, Maturity After 10 Years	21,255
Total fair value of debt securities, Total	23,208
U.S. Treasury and other
Available-for-sale Securities and Held-to-maturity Securities, Debt Maturities, Amortized Cost Basis [Abstract]
Amortized Cost, Debt securities available for sale, Maturity of 1 Year or Less	15
Amortized Cost, Debt securities available for sale, Maturity of 1-5 Years	0
Amortized Cost, Debt securities available for sale, Maturity of 5-10 Years	1
Amortized Cost, Debt securities available for sale, Maturity After 10 Years	0
Amortized Cost, Debt securities available for sale, Total	16
Available-for-sale Securities and Held-to-maturity Securities, Debt Maturities, Fair Value [Abstract]
Fair Value, Debt securities available for sale, Maturity of 1 Year or Less	15
Fair Value, Debt securities available for sale, Maturity of 1-5 Years	0
Fair Value, Debt securities available for sale, Maturity of 5-10 Years	1
Fair Value, Debt securities available for sale, Maturity After 10 Years	0
Fair Value, Debt securities available for sale, Total	16
State and political subdivisions
Available-for-sale Securities and Held-to-maturity Securities, Debt Maturities, Amortized Cost Basis [Abstract]
Amortized Cost, Debt securities available for sale, Maturity of 1 Year or Less	0
Amortized Cost, Debt securities available for sale, Maturity of 1-5 Years	0
Amortized Cost, Debt securities available for sale, Maturity of 5-10 Years	0
Amortized Cost, Debt securities available for sale, Maturity After 10 Years	9
Amortized Cost, Debt securities available for sale, Total	9
Available-for-sale Securities and Held-to-maturity Securities, Debt Maturities, Fair Value [Abstract]
Fair Value, Debt securities available for sale, Maturity of 1 Year or Less	0
Fair Value, Debt securities available for sale, Maturity of 1-5 Years	0
Fair Value, Debt securities available for sale, Maturity of 5-10 Years	0
Fair Value, Debt securities available for sale, Maturity After 10 Years	9
Fair Value, Debt securities available for sale, Total	9
Federal agencies and U.S. government sponsored entities
Available-for-sale Securities and Held-to-maturity Securities, Debt Maturities, Amortized Cost Basis [Abstract]
Amortized Cost, Debt securities available for sale, Maturity of 1 Year or Less	15
Amortized Cost, Debt securities available for sale, Maturity of 1-5 Years	37
Amortized Cost, Debt securities available for sale, Maturity of 5-10 Years	1,790
Amortized Cost, Debt securities available for sale, Maturity After 10 Years	15,305
Amortized Cost, Debt securities available for sale, Total	17,147
Amortized Cost, Debt securities held to maturity, Maturity of 1 Year or Less	0
Amortized Cost, Debt securities held to maturity, Maturity of 1-5 Years	0
Amortized Cost, Debt securities held to maturity, Maturity of 5-10 Years	0
Amortized Cost, Debt securities held to maturity, Maturity After 10 Years	4,010
Amortized Cost, Debt securities held to maturity, Total	4,010
Available-for-sale Securities and Held-to-maturity Securities, Debt Maturities, Fair Value [Abstract]
Fair Value, Debt securities available for sale, Maturity of 1 Year or Less	15
Fair Value, Debt securities available for sale, Maturity of 1-5 Years	39
Fair Value, Debt securities available for sale, Maturity of 5-10 Years	1,823
Fair Value, Debt securities available for sale, Maturity After 10 Years	15,557
Fair Value, Debt securities available for sale, Total	17,434
Fair Value, Debt securities held to maturity, Maturity of 1 Year or Less	0
Fair Value, Debt securities held to maturity, Maturity of 1-5 Years	0
Fair Value, Debt securities held to maturity, Maturity of 5-10 Years	0
Fair Value, Debt securities held to maturity, Maturity After 10 Years	4,103
Fair Value, Debt securities held to maturity, Total	4,103
Other/non-agency
Available-for-sale Securities and Held-to-maturity Securities, Debt Maturities, Amortized Cost Basis [Abstract]
Amortized Cost, Debt securities available for sale, Maturity of 1 Year or Less	0
Amortized Cost, Debt securities available for sale, Maturity of 1-5 Years	57
Amortized Cost, Debt securities available for sale, Maturity of 5-10 Years	3
Amortized Cost, Debt securities available for sale, Maturity After 10 Years	466
Amortized Cost, Debt securities available for sale, Total	526
Amortized Cost, Debt securities held to maturity, Maturity of 1 Year or Less	0
Amortized Cost, Debt securities held to maturity, Maturity of 1-5 Years	0
Amortized Cost, Debt securities held to maturity, Maturity of 5-10 Years	0
Amortized Cost, Debt securities held to maturity, Maturity After 10 Years	1,119
Amortized Cost, Debt securities held to maturity, Total	1,119
Available-for-sale Securities and Held-to-maturity Securities, Debt Maturities, Fair Value [Abstract]
Fair Value, Debt securities available for sale, Maturity of 1 Year or Less	0
Fair Value, Debt securities available for sale, Maturity of 1-5 Years	57
Fair Value, Debt securities available for sale, Maturity of 5-10 Years	3
Fair Value, Debt securities available for sale, Maturity After 10 Years	428
Fair Value, Debt securities available for sale, Total	488
Fair Value, Debt securities held to maturity, Maturity of 1 Year or Less	0
Fair Value, Debt securities held to maturity, Maturity of 1-5 Years	0
Fair Value, Debt securities held to maturity, Maturity of 5-10 Years	0
Fair Value, Debt securities held to maturity, Maturity After 10 Years	1,158
Fair Value, Debt securities held to maturity, Total	$ 1,158

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SECURITIES - Income Recognized from Investment Securities (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Interest Income, Securities, Operating, by Taxable Status [Abstract]
Taxable	$ 145	$ 159
Non-taxable	0	0
Total interest income from investment securities and interest-bearing deposits in banks	145	159
Gain (Loss) on Sale of Investments [Abstract]
Gains on sale of debt securities	9	12
Losses on sale of debt securities	0	(4)
Debt securities gains, net	9	8
Equity securities gains	$ 0	$ 2

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SECURITIES - Schedule of Securities Pledged (Details) - USD ($) $ in Millions	Mar. 31, 2016	Dec. 31, 2015
Investments, Debt and Equity Securities [Abstract]
Pledged against repurchase agreements, Amortized Cost	$ 682	$ 805
Pledged against Federal Home Loan Bank borrowed funds, Amortized Cost	1,129	1,163
Pledged against derivatives to qualify for fiduciary powers, and to secure public and other deposits as required by law, Amortized Cost	3,336	3,579
Pledged against repurchase agreements, Fair Value	695	808
Pledged against Federal Home Loan Bank borrowed funds, Fair Value	1,168	1,186
Pledged against derivatives to qualify for fiduciary powers, and to secure public and other deposits as required by law, Fair Value	$ 3,406	$ 3,610

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SECURITIES - Schedule of Balance Sheet Effect of Repurchase Agreement Offsetting (Details) - USD ($) $ in Millions	Mar. 31, 2016	Dec. 31, 2015
Investments, Debt and Equity Securities [Abstract]
Securities purchased under agreements to resell, gross	$ 0	$ 500
Securities purchased under agreements to resell, offset	0	(500)
Securities purchased under agreements to resell	0	0
Securities sold under agreements to repurchase, gross	0	(500)
Securities sold under agreements to repurchase, offset	0	500
Securities sold under agreements to repurchase, net	$ 0	$ 0

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LOANS AND LEASES - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held for sale	$ 365		$ 325
Other loans held for sale	386		40
Residential mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans pledged as collateral for FHLB borrowed funds	23,700		23,200
Loans pledged as collateral to support the contingent ability to borrow at the FRB discount window	15,600		15,900
Commercial loan syndication
Accounts, Notes, Loans and Financing Receivable [Line Items]
Other loans held for sale	13		40
Automobile
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans purchased during period	134	$ 393
Residential portfolio segment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans purchased during period	120	249
Mortgage loans sold	173	273
Student loan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans purchased during period	369	261
Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans sold during the period	73	$ 111
Level 2
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held for sale	365		325
Other loans held for sale	0		0
Residential loans held for sale | Level 2
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held for sale	292		268
Commercial real estate loans held for sale | Level 2
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held for sale	73		$ 57
TDR Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Other loans held for sale	373
TDR Loans | Home equity loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Other loans held for sale	85
TDR Loans | Residential mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
Other loans held for sale	$ 288

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LOANS AND LEASES - Summary of Loans and Leases Portfolio (Details) - USD ($) $ in Millions		Mar. 31, 2016	Dec. 31, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commercial loans and leases		$ 47,972	$ 46,214
Loans and leases retail		53,019	52,828
Loans and leases		100,991	99,042
Total loans receivable held for sale		751	365
Banking Subsidiaries
Accounts, Notes, Loans and Financing Receivable [Line Items]
Mortgage loans serviced for others by the Company's subsidiaries		17,400	17,600
Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commercial loans and leases		34,671	33,264
Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commercial loans and leases		9,406	8,971
Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commercial loans and leases		3,895	3,979
Residential mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases retail		13,345	13,318
Home equity loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases retail		2,313	2,557
Home equity lines of credit
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases retail		14,526	14,674
Home equity loans serviced by others
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases retail	[1]	930	986
Home equity lines of credit serviced by others
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases retail	[1]	339	389
Automobile
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases retail		13,847	13,828
Student
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases retail		5,006	4,359
Credit cards
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases retail		1,581	1,634
Other retail
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases retail		1,132	1,083
Total Loans and Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases	[2],[3]	$ 100,991	$ 99,042

[1] The Company’s SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

[2] Excluded from the table above are loans held for sale totaling $751 million and $365 million as of March 31, 2016 and December 31, 2015, respectively.

[3] Mortgage loans serviced for others by the Company’s subsidiaries are not included above and amounted to $17.4 billion and $17.6 billion at March 31, 2016 and December 31, 2015, respectively.

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ALLOWANCE FOR CREDIT LOSSES, NONPERFORMING ASSETS, AND CONCENTRATIONS OF CREDIT RISK - Narrative (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Financing Receivable, Modifications [Line Items]
Mortgage loans collateralized by OREO	$ 216	$ 257
Larger balance commercial loans minimum balance (greater than)	3	3
Other loans held for sale	386	40
Commitments to lend additional funds to debtors owing receivables which were TDRs	$ 28	$ 15
High loan to value criteria (exceeds)	90.00%	90.00%
Total commercial
Financing Receivable, Modifications [Line Items]
TDR balance	$ 143	$ 155
Total retail
Financing Receivable, Modifications [Line Items]
TDR balance	775	$ 1,200
TDR Loans
Financing Receivable, Modifications [Line Items]
Other loans held for sale	373
TDR Loans | Residential mortgages
Financing Receivable, Modifications [Line Items]
Other loans held for sale	288
TDR Loans | Home equity loans
Financing Receivable, Modifications [Line Items]
Other loans held for sale	$ 85

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ALLOWANCE FOR CREDIT LOSSES, NONPERFORMING ASSETS, AND CONCENTRATIONS OF CREDIT RISK - Summary of Changes in Allowance for Credit Losses (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Allowance for Loan and Lease Losses [Roll Forward]
Allowance for loan and lease losses / Reserve for unfunded lending commitments, Beginning balance	$ 1,216
Provision charged to income	91	$ 58
Allowance for loan and lease losses / Reserve for unfunded lending commitments, Ending balance	1,224
Allowance for loan and lease losses
Allowance for Loan and Lease Losses [Roll Forward]
Allowance for loan and lease losses / Reserve for unfunded lending commitments, Beginning balance	1,216	1,195
Charge-offs	(126)	(115)
Recoveries	43	61
Net charge-offs	(83)	(54)
Sales/Other		(2)
Provision charged to income	91	63
Allowance for loan and lease losses / Reserve for unfunded lending commitments, Ending balance	1,224	1,202
Allowance for loan and lease losses | Commercial
Allowance for Loan and Lease Losses [Roll Forward]
Allowance for loan and lease losses / Reserve for unfunded lending commitments, Beginning balance	596	544
Charge-offs	(13)	(6)
Recoveries	4	28
Net charge-offs	(9)	22
Sales/Other		0
Provision charged to income	46	12
Allowance for loan and lease losses / Reserve for unfunded lending commitments, Ending balance	633	578
Allowance for loan and lease losses | Retail
Allowance for Loan and Lease Losses [Roll Forward]
Allowance for loan and lease losses / Reserve for unfunded lending commitments, Beginning balance	620	651
Charge-offs	(113)	(109)
Recoveries	39	33
Net charge-offs	(74)	(76)
Sales/Other		(2)
Provision charged to income	45	51
Allowance for loan and lease losses / Reserve for unfunded lending commitments, Ending balance	591	624
Reserve for unfunded lending commitments
Allowance for Loan and Lease Losses [Roll Forward]
Allowance for loan and lease losses / Reserve for unfunded lending commitments, Beginning balance	58	61
Credit for unfunded lending commitments	0	(5)
Allowance for loan and lease losses / Reserve for unfunded lending commitments, Ending balance	58	56
Reserve for unfunded lending commitments | Commercial
Allowance for Loan and Lease Losses [Roll Forward]
Allowance for loan and lease losses / Reserve for unfunded lending commitments, Beginning balance	58	61
Credit for unfunded lending commitments	0	(5)
Allowance for loan and lease losses / Reserve for unfunded lending commitments, Ending balance	58	56
Reserve for unfunded lending commitments | Retail
Allowance for Loan and Lease Losses [Roll Forward]
Allowance for loan and lease losses / Reserve for unfunded lending commitments, Beginning balance	0	0
Credit for unfunded lending commitments	0	0
Allowance for loan and lease losses / Reserve for unfunded lending commitments, Ending balance	0	0
Allowance for loan and lease losses and reserve for off-balance sheet activities, total
Allowance for Loan and Lease Losses [Roll Forward]
Allowance for loan and lease losses / Reserve for unfunded lending commitments, Ending balance	1,282	1,258
Allowance for loan and lease losses and reserve for off-balance sheet activities, total | Commercial
Allowance for Loan and Lease Losses [Roll Forward]
Allowance for loan and lease losses / Reserve for unfunded lending commitments, Ending balance	691	634
Allowance for loan and lease losses and reserve for off-balance sheet activities, total | Retail
Allowance for Loan and Lease Losses [Roll Forward]
Allowance for loan and lease losses / Reserve for unfunded lending commitments, Ending balance	$ 591	$ 624

XML

ALLOWANCE FOR CREDIT LOSSES, NONPERFORMING ASSETS, AND CONCENTRATIONS OF CREDIT RISK - Recorded Investment in Loan and Leases (Details) - Loans and Leases - USD ($) $ in Millions	Mar. 31, 2016	Dec. 31, 2015
Financing Receivable, Recorded Investment [Line Items]
Individually evaluated	$ 1,214	$ 1,383
Formula-based evaluation	99,777	97,659
Total	100,991	99,042
Commercial Banking
Financing Receivable, Recorded Investment [Line Items]
Individually evaluated	439	218
Formula-based evaluation	47,533	45,996
Total	47,972	46,214
Retail
Financing Receivable, Recorded Investment [Line Items]
Individually evaluated	775	1,165
Formula-based evaluation	52,244	51,663
Total	$ 53,019	$ 52,828

XML

ALLOWANCE FOR CREDIT LOSSES, NONPERFORMING ASSETS, AND CONCENTRATIONS OF CREDIT RISK - Summary of Allowance for Credit Losses by Evaluation Method (Details) - Loans and Leases - USD ($) $ in Millions	Mar. 31, 2016	Dec. 31, 2015
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually evaluated	$ 124	$ 137
Formula-based evaluation	1,158	1,137
Allowance for credit losses	1,282	1,274
Commercial Banking
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually evaluated	42	36
Formula-based evaluation	649	618
Allowance for credit losses	691	654
Retail
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually evaluated	82	101
Formula-based evaluation	509	519
Allowance for credit losses	$ 591	$ 620

XML

ALLOWANCE FOR CREDIT LOSSES, NONPERFORMING ASSETS, AND CONCENTRATIONS OF CREDIT RISK - Recorded Investment in Commercial Loans and Leases by Regulatory Classification Ratings (Details) - Loans and Leases - USD ($) $ in Millions	Mar. 31, 2016	Dec. 31, 2015
Financing Receivable, Recorded Investment [Line Items]
Total	$ 100,991	$ 99,042
Commercial Banking
Financing Receivable, Recorded Investment [Line Items]
Total	47,972	46,214
Commercial
Financing Receivable, Recorded Investment [Line Items]
Total	34,671	33,264
Commercial real estate
Financing Receivable, Recorded Investment [Line Items]
Total	9,406	8,971
Leases
Financing Receivable, Recorded Investment [Line Items]
Total	3,895	3,979
Pass | Commercial Banking
Financing Receivable, Recorded Investment [Line Items]
Total	45,198	43,606
Pass | Commercial
Financing Receivable, Recorded Investment [Line Items]
Total	32,567	31,276
Pass | Commercial real estate
Financing Receivable, Recorded Investment [Line Items]
Total	8,864	8,450
Pass | Leases
Financing Receivable, Recorded Investment [Line Items]
Total	3,767	3,880
Special Mention | Commercial Banking
Financing Receivable, Recorded Investment [Line Items]
Total	1,272	1,238
Special Mention | Commercial
Financing Receivable, Recorded Investment [Line Items]
Total	928	911
Special Mention | Commercial real estate
Financing Receivable, Recorded Investment [Line Items]
Total	272	272
Special Mention | Leases
Financing Receivable, Recorded Investment [Line Items]
Total	72	55
Substandard | Commercial Banking
Financing Receivable, Recorded Investment [Line Items]
Total	1,326	1,217
Substandard | Commercial
Financing Receivable, Recorded Investment [Line Items]
Total	1,086	1,002
Substandard | Commercial real estate
Financing Receivable, Recorded Investment [Line Items]
Total	184	171
Substandard | Leases
Financing Receivable, Recorded Investment [Line Items]
Total	56	44
Doubtful | Commercial Banking
Financing Receivable, Recorded Investment [Line Items]
Total	176	153
Doubtful | Commercial
Financing Receivable, Recorded Investment [Line Items]
Total	90	75
Doubtful | Commercial real estate
Financing Receivable, Recorded Investment [Line Items]
Total	86	78
Doubtful | Leases
Financing Receivable, Recorded Investment [Line Items]
Total	$ 0	$ 0

XML

ALLOWANCE FOR CREDIT LOSSES, NONPERFORMING ASSETS, AND CONCENTRATIONS OF CREDIT RISK - Recorded Investment in Retail Loans by Delinquency Status (Details) - Loans and Leases - USD ($) $ in Millions		Mar. 31, 2016	Dec. 31, 2015
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		$ 1,409	$ 1,356
Total		100,991	99,042
Residential mortgages
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current		13,058	12,905
Past Due		210	316
Total		13,345	13,318
Home equity loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current		2,055	2,245
Past Due		111	148
Total		2,313	2,557
Home equity lines of credit
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current		13,870	13,982
Past Due		276	285
Total		14,526	14,674
Home equity loans serviced by others
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	[1]	840	886
Past Due	[1]	35	40
Total	[1]	930	986
Home equity lines of credit serviced by others
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	[1]	250	296
Past Due	[1]	49	45
Total	[1]	339	389
Automobile
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current		12,827	12,670
Past Due		160	194
Total		13,847	13,828
Student
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current		4,848	4,175
Past Due		71	71
Total		5,006	4,359
Credit cards
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current		1,511	1,554
Past Due		33	36
Total		1,581	1,634
Other retail
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current		1,069	1,013
Past Due		14	17
Total		1,132	1,083
Total retail
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current		50,328	49,726
Total		53,019	52,828
Financing Receivables, 1 to 29 Days Past Due | Residential mortgages
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		77	97
Financing Receivables, 1 to 29 Days Past Due | Home equity loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		147	164
Financing Receivables, 1 to 29 Days Past Due | Home equity lines of credit
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		380	407
Financing Receivables, 1 to 29 Days Past Due | Home equity loans serviced by others
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	[1]	55	60
Financing Receivables, 1 to 29 Days Past Due | Home equity lines of credit serviced by others
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	[1]	40	48
Financing Receivables, 1 to 29 Days Past Due | Automobile
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		860	964
Financing Receivables, 1 to 29 Days Past Due | Student
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		87	113
Financing Receivables, 1 to 29 Days Past Due | Credit cards
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		37	44
Financing Receivables, 1 to 29 Days Past Due | Other retail
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		49	53
Financing Receivables, 1 to 29 Days Past Due | Total retail
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		1,732	1,950
Financing Receivables, 30 to 59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		362	383
Financing Receivables, 30 to 59 Days Past Due | Residential mortgages
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		52	54
Financing Receivables, 30 to 59 Days Past Due | Home equity loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		26	32
Financing Receivables, 30 to 59 Days Past Due | Home equity lines of credit
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		53	60
Financing Receivables, 30 to 59 Days Past Due | Home equity loans serviced by others
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	[1]	14	14
Financing Receivables, 30 to 59 Days Past Due | Home equity lines of credit serviced by others
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	[1]	9	10
Financing Receivables, 30 to 59 Days Past Due | Automobile
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		104	127
Financing Receivables, 30 to 59 Days Past Due | Student
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		17	19
Financing Receivables, 30 to 59 Days Past Due | Credit cards
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		10	11
Financing Receivables, 30 to 59 Days Past Due | Other retail
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		9	8
Financing Receivables, 30 to 59 Days Past Due | Total retail
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		294	335
Financing Receivables 60 To 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		80	124
Financing Receivables 60 To 89 Days Past Due | Residential mortgages
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		7	16
Financing Receivables 60 To 89 Days Past Due | Home equity loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		5	12
Financing Receivables 60 To 89 Days Past Due | Home equity lines of credit
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		17	20
Financing Receivables 60 To 89 Days Past Due | Home equity loans serviced by others
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	[1]	1	6
Financing Receivables 60 To 89 Days Past Due | Home equity lines of credit serviced by others
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	[1]	5	6
Financing Receivables 60 To 89 Days Past Due | Automobile
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		20	32
Financing Receivables 60 To 89 Days Past Due | Student
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		9	11
Financing Receivables 60 To 89 Days Past Due | Credit cards
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		7	9
Financing Receivables 60 To 89 Days Past Due | Other retail
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		2	4
Financing Receivables 60 To 89 Days Past Due | Total retail
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		73	116
Financing Receivables 90 Days or More Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		967	849
Financing Receivables 90 Days or More Past Due | Residential mortgages
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		151	246
Financing Receivables 90 Days or More Past Due | Home equity loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		80	104
Financing Receivables 90 Days or More Past Due | Home equity lines of credit
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		206	205
Financing Receivables 90 Days or More Past Due | Home equity loans serviced by others
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	[1]	20	20
Financing Receivables 90 Days or More Past Due | Home equity lines of credit serviced by others
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	[1]	35	29
Financing Receivables 90 Days or More Past Due | Automobile
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		36	35
Financing Receivables 90 Days or More Past Due | Student
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		45	41
Financing Receivables 90 Days or More Past Due | Credit cards
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		16	16
Financing Receivables 90 Days or More Past Due | Other retail
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		3	5
Financing Receivables 90 Days or More Past Due | Total retail
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		$ 592	$ 701

[1] The Company’s SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

XML

ALLOWANCE FOR CREDIT LOSSES, NONPERFORMING ASSETS, AND CONCENTRATIONS OF CREDIT RISK - Nonperforming Loans and Leases by Class (Details) - USD ($) $ in Millions		Mar. 31, 2016		Dec. 31, 2015
Financing Receivable, Recorded Investment, Past Due [Line Items]
Nonperforming loans		$ 1,079	[1]	$ 1,051
Nonperforming loans including 90 days past due	[1]			1,060
Loans accruing and 90 days or more past due		32		9
Other loans held for sale		386		40
GNMA
Financing Receivable, Recorded Investment, Past Due [Line Items]
Nonperforming loans sold with right to repurchase		37
Commercial Banking
Financing Receivable, Recorded Investment, Past Due [Line Items]
Nonperforming loans	[1]	370
Nonperforming loans including 90 days past due	[1]			148
Loans accruing and 90 days or more past due		4		1
Commercial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Nonperforming loans	[1]	284
Nonperforming loans including 90 days past due	[1]			71
Loans accruing and 90 days or more past due		2		1
Commercial real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Nonperforming loans	[1]	86
Nonperforming loans including 90 days past due	[1]			77
Loans accruing and 90 days or more past due		2		0
Leases
Financing Receivable, Recorded Investment, Past Due [Line Items]
Nonperforming loans	[1]	0
Nonperforming loans including 90 days past due	[1]			0
Loans accruing and 90 days or more past due		0		0
Retail
Financing Receivable, Recorded Investment, Past Due [Line Items]
Nonperforming loans	[1]	709
Nonperforming loans including 90 days past due	[1]			912
Loans accruing and 90 days or more past due		28		8
Residential mortgages
Financing Receivable, Recorded Investment, Past Due [Line Items]
Nonperforming loans	[1],[2],[3],[4]	174
Nonperforming loans including 90 days past due	[1],[2],[3],[4]			331
Loans accruing and 90 days or more past due	[2],[3],[4]	22		0
Home equity loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Nonperforming loans	[1],[2]	99
Nonperforming loans including 90 days past due	[1],[2]			135
Loans accruing and 90 days or more past due	[2]	0		0
Home equity lines of credit
Financing Receivable, Recorded Investment, Past Due [Line Items]
Nonperforming loans	[1]	261
Nonperforming loans including 90 days past due	[1]			272
Loans accruing and 90 days or more past due		0		0
Home equity loans serviced by others
Financing Receivable, Recorded Investment, Past Due [Line Items]
Nonperforming loans	[1],[5]	37
Nonperforming loans including 90 days past due	[1],[5]			38
Loans accruing and 90 days or more past due	[5]	0		0
Home equity lines of credit serviced by others
Financing Receivable, Recorded Investment, Past Due [Line Items]
Nonperforming loans	[1],[5]	38
Nonperforming loans including 90 days past due	[1],[5]			32
Loans accruing and 90 days or more past due	[5]	0		0
Automobile
Financing Receivable, Recorded Investment, Past Due [Line Items]
Nonperforming loans	[1]	42
Nonperforming loans including 90 days past due	[1]			42
Loans accruing and 90 days or more past due		0		0
Student
Financing Receivable, Recorded Investment, Past Due [Line Items]
Nonperforming loans	[1]	40
Nonperforming loans including 90 days past due	[1]			41
Loans accruing and 90 days or more past due		5		6
Credit cards
Financing Receivable, Recorded Investment, Past Due [Line Items]
Nonperforming loans	[1]	16
Nonperforming loans including 90 days past due	[1]			16
Loans accruing and 90 days or more past due		0		0
Other retail
Financing Receivable, Recorded Investment, Past Due [Line Items]
Nonperforming loans	[1]	2
Nonperforming loans including 90 days past due	[1]			5
Loans accruing and 90 days or more past due		1		$ 2
TDR Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Other loans held for sale		373
TDR Loans | Residential mortgages
Financing Receivable, Recorded Investment, Past Due [Line Items]
Other loans held for sale		288
TDR Loans | Home equity loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Other loans held for sale		85
Total Loans and Leases | TDR Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Other loans held for sale		97
Total Loans and Leases | TDR Loans | Residential mortgages
Financing Receivable, Recorded Investment, Past Due [Line Items]
Other loans held for sale		66
Total Loans and Leases | TDR Loans | Home equity loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Other loans held for sale		$ 31

[1] Effective March 31, 2016, the Company began excluding loans 90 days or more past due and still accruing, which includes loans guaranteed by government-sponsored entities, from nonperforming loans and leases. Nonperforming loans and leases as of December 31, 2015 included loans and leases on nonaccrual of $1.051 billion and loans and leases accruing and 90 days or more past due of $9 million.

[2] $97 million of previously nonperforming troubled debt restructured loans were transferred from loans and leases to other loans held for sale on March 31, 2016, including $66 million of residential mortgages and $31 million of home equity loans.

[3] Effective March 31, 2016, the Company began excluding first lien residential mortgage loans that are 100% guaranteed by the Federal Housing Administration from nonperforming balances; $22 million of these loans are presented above as accruing and 90 days or more past due.

[4] Effective March 31, 2016, the Company began excluding guaranteed residential mortgage loans sold to GNMA for which the Company had the right but not the obligation to repurchase from nonperforming balances; these totaled $37 million; these loans are consolidated on the Company’s Consolidated Balance Sheets.

[5] The Company’s SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

XML

ALLOWANCE FOR CREDIT LOSSES, NONPERFORMING ASSETS, AND CONCENTRATIONS OF CREDIT RISK - Other Nonperforming Assets (Details) - USD ($) $ in Millions	Mar. 31, 2016	Dec. 31, 2015
Financing Receivable, Recorded Investment, Past Due [Line Items]
Other nonperforming assets, net of valuation allowance	$ 48	$ 46
Commercial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Other nonperforming assets, net of valuation allowance	1	1
Retail
Financing Receivable, Recorded Investment, Past Due [Line Items]
Other nonperforming assets, net of valuation allowance	$ 47	$ 45

XML

ALLOWANCE FOR CREDIT LOSSES, NONPERFORMING ASSETS, AND CONCENTRATIONS OF CREDIT RISK - Performance Indicators for Nonperforming Assets (Details) - USD ($) $ in Millions	Mar. 31, 2016	Dec. 31, 2015
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans accruing and 90 days or more past due	$ 32	$ 9
Nonperforming loans and leases as a percentage of total loans and leases	1.07%	1.07%	[1]
Nonperforming assets as a percentage of total assets	0.80%	0.80%	[1]
Commercial Banking
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans accruing and 90 days or more past due	$ 4	$ 1
Nonperforming loans and leases as a percentage of total loans and leases	0.37%	0.15%	[1]
Nonperforming assets as a percentage of total assets	0.26%	0.11%	[1]
Retail
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans accruing and 90 days or more past due	$ 28	$ 8
Nonperforming loans and leases as a percentage of total loans and leases	0.70%	0.92%	[1]
Nonperforming assets as a percentage of total assets	0.54%	0.69%	[1]

[1] December 31, 2015 ratios included loans accruing and 90 days or more past due of $1 million and $8 million for commercial and retail, respectively.

XML

ALLOWANCE FOR CREDIT LOSSES, NONPERFORMING ASSETS, AND CONCENTRATIONS OF CREDIT RISK - Accruing and Nonaccruing Past Due Amounts (Details) - Loans and Leases - USD ($) $ in Millions		Mar. 31, 2016	Dec. 31, 2015
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		$ 1,409	$ 1,356
Commercial Banking
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		450	204
Commercial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		307	84
Commercial real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		128	110
Leases
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		15	10
Retail
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		959	1,152
Residential mortgages
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		210	316
Home equity loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		111	148
Home equity lines of credit
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		276	285
Home equity loans serviced by others
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	[1]	35	40
Home equity lines of credit serviced by others
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	[1]	49	45
Automobile
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		160	194
Student
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		71	71
Credit cards
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		33	36
Other retail
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		14	17
Financing Receivables, 30 to 59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		362	383
Financing Receivables, 30 to 59 Days Past Due | Commercial Banking
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		68	48
Financing Receivables, 30 to 59 Days Past Due | Commercial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		13	9
Financing Receivables, 30 to 59 Days Past Due | Commercial real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		40	30
Financing Receivables, 30 to 59 Days Past Due | Leases
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		15	9
Financing Receivables, 30 to 59 Days Past Due | Retail
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		294	335
Financing Receivables, 30 to 59 Days Past Due | Residential mortgages
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		52	54
Financing Receivables, 30 to 59 Days Past Due | Home equity loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		26	32
Financing Receivables, 30 to 59 Days Past Due | Home equity lines of credit
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		53	60
Financing Receivables, 30 to 59 Days Past Due | Home equity loans serviced by others
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	[1]	14	14
Financing Receivables, 30 to 59 Days Past Due | Home equity lines of credit serviced by others
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	[1]	9	10
Financing Receivables, 30 to 59 Days Past Due | Automobile
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		104	127
Financing Receivables, 30 to 59 Days Past Due | Student
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		17	19
Financing Receivables, 30 to 59 Days Past Due | Credit cards
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		10	11
Financing Receivables, 30 to 59 Days Past Due | Other retail
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		9	8
Financing Receivables 60 To 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		80	124
Financing Receivables 60 To 89 Days Past Due | Commercial Banking
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		7	8
Financing Receivables 60 To 89 Days Past Due | Commercial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		7	4
Financing Receivables 60 To 89 Days Past Due | Commercial real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		0	3
Financing Receivables 60 To 89 Days Past Due | Leases
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		0	1
Financing Receivables 60 To 89 Days Past Due | Retail
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		73	116
Financing Receivables 60 To 89 Days Past Due | Residential mortgages
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		7	16
Financing Receivables 60 To 89 Days Past Due | Home equity loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		5	12
Financing Receivables 60 To 89 Days Past Due | Home equity lines of credit
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		17	20
Financing Receivables 60 To 89 Days Past Due | Home equity loans serviced by others
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	[1]	1	6
Financing Receivables 60 To 89 Days Past Due | Home equity lines of credit serviced by others
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	[1]	5	6
Financing Receivables 60 To 89 Days Past Due | Automobile
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		20	32
Financing Receivables 60 To 89 Days Past Due | Student
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		9	11
Financing Receivables 60 To 89 Days Past Due | Credit cards
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		7	9
Financing Receivables 60 To 89 Days Past Due | Other retail
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		2	4
Financing Receivables 90 Days or More Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		967	849
Financing Receivables 90 Days or More Past Due | Commercial Banking
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		375	148
Financing Receivables 90 Days or More Past Due | Commercial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		287	71
Financing Receivables 90 Days or More Past Due | Commercial real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		88	77
Financing Receivables 90 Days or More Past Due | Leases
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		0	0
Financing Receivables 90 Days or More Past Due | Retail
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		592	701
Financing Receivables 90 Days or More Past Due | Residential mortgages
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		151	246
Financing Receivables 90 Days or More Past Due | Home equity loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		80	104
Financing Receivables 90 Days or More Past Due | Home equity lines of credit
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		206	205
Financing Receivables 90 Days or More Past Due | Home equity loans serviced by others
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	[1]	20	20
Financing Receivables 90 Days or More Past Due | Home equity lines of credit serviced by others
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	[1]	35	29
Financing Receivables 90 Days or More Past Due | Automobile
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		36	35
Financing Receivables 90 Days or More Past Due | Student
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		45	41
Financing Receivables 90 Days or More Past Due | Credit cards
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		16	16
Financing Receivables 90 Days or More Past Due | Other retail
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due		$ 3	$ 5

[1] The Company’s SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

XML

ALLOWANCE FOR CREDIT LOSSES, NONPERFORMING ASSETS, AND CONCENTRATIONS OF CREDIT RISK - Impaired Loans by Class (Details) - USD ($) $ in Millions		Mar. 31, 2016		Dec. 31, 2015
Financing Receivable, Recorded Investment, Past Due [Line Items]
Impaired Loans With a Related Allowance		$ 591		$ 641
Allowance on Impaired Loans		124		137
Impaired Loans Without a Related Allowance		623		742
Unpaid Contractual Balance		1,383		1,671
Total Recorded Investment in Impaired Loans		1,214		1,383
Other loans held for sale		386		40
TDR Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Other loans held for sale		373
Commercial Banking
Financing Receivable, Recorded Investment, Past Due [Line Items]
Impaired Loans With a Related Allowance		219		148
Allowance on Impaired Loans		42		36
Impaired Loans Without a Related Allowance		220		70
Unpaid Contractual Balance		483		214
Total Recorded Investment in Impaired Loans		439		218
Commercial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Impaired Loans With a Related Allowance		163		92
Allowance on Impaired Loans		30		23
Impaired Loans Without a Related Allowance		208		58
Unpaid Contractual Balance		414		144
Total Recorded Investment in Impaired Loans		371		150
Commercial real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Impaired Loans With a Related Allowance		56		56
Allowance on Impaired Loans		12		13
Impaired Loans Without a Related Allowance		12		12
Unpaid Contractual Balance		69		70
Total Recorded Investment in Impaired Loans		68		68
Retail
Financing Receivable, Recorded Investment, Past Due [Line Items]
Impaired Loans With a Related Allowance		372		493
Allowance on Impaired Loans		82		101
Impaired Loans Without a Related Allowance		403		672
Unpaid Contractual Balance		900		1,457
Total Recorded Investment in Impaired Loans		775		1,165
Residential mortgages
Financing Receivable, Recorded Investment, Past Due [Line Items]
Impaired Loans With a Related Allowance		35	[1]	121
Allowance on Impaired Loans		4	[1]	16
Impaired Loans Without a Related Allowance		111	[1]	320
Unpaid Contractual Balance		183	[1]	608
Total Recorded Investment in Impaired Loans		146	[1]	441
Residential mortgages | TDR Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Other loans held for sale		288
Home equity loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Impaired Loans With a Related Allowance		55	[1]	85
Allowance on Impaired Loans		6	[1]	11
Impaired Loans Without a Related Allowance		84	[1]	139
Unpaid Contractual Balance		165	[1]	283
Total Recorded Investment in Impaired Loans		139	[1]	224
Home equity loans | TDR Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Other loans held for sale		85
Home equity lines of credit
Financing Receivable, Recorded Investment, Past Due [Line Items]
Impaired Loans With a Related Allowance		25		27
Allowance on Impaired Loans		3		2
Impaired Loans Without a Related Allowance		165		167
Unpaid Contractual Balance		227		234
Total Recorded Investment in Impaired Loans		190		194
Home equity loans serviced by others
Financing Receivable, Recorded Investment, Past Due [Line Items]
Impaired Loans With a Related Allowance	[2]	48		50
Allowance on Impaired Loans	[2]	7		8
Impaired Loans Without a Related Allowance	[2]	22		24
Unpaid Contractual Balance	[2]	84		88
Total Recorded Investment in Impaired Loans	[2]	70		74
Home equity lines of credit serviced by others
Financing Receivable, Recorded Investment, Past Due [Line Items]
Impaired Loans With a Related Allowance	[2]	3		3
Allowance on Impaired Loans	[2]	0		1
Impaired Loans Without a Related Allowance	[2]	7		7
Unpaid Contractual Balance	[2]	14		14
Total Recorded Investment in Impaired Loans	[2]	10		10
Automobile
Financing Receivable, Recorded Investment, Past Due [Line Items]
Impaired Loans With a Related Allowance		3		3
Allowance on Impaired Loans		0		0
Impaired Loans Without a Related Allowance		11		11
Unpaid Contractual Balance		19		19
Total Recorded Investment in Impaired Loans		14		14
Student
Financing Receivable, Recorded Investment, Past Due [Line Items]
Impaired Loans With a Related Allowance		163		163
Allowance on Impaired Loans		47		48
Impaired Loans Without a Related Allowance		1		2
Unpaid Contractual Balance		164		165
Total Recorded Investment in Impaired Loans		164		165
Credit cards
Financing Receivable, Recorded Investment, Past Due [Line Items]
Impaired Loans With a Related Allowance		27		28
Allowance on Impaired Loans		11		11
Impaired Loans Without a Related Allowance		0		0
Unpaid Contractual Balance		27		28
Total Recorded Investment in Impaired Loans		27		28
Other retail
Financing Receivable, Recorded Investment, Past Due [Line Items]
Impaired Loans With a Related Allowance		13		13
Allowance on Impaired Loans		4		4
Impaired Loans Without a Related Allowance		2		2
Unpaid Contractual Balance		17		18
Total Recorded Investment in Impaired Loans		$ 15		$ 15

[1] Excluded from the table above are retail TDR principal balances held for sale with a total recorded investment of $373 million, including residential mortgages of $288 million and home equity loans of $85 million.

[2] The Company’s SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

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ALLOWANCE FOR CREDIT LOSSES, NONPERFORMING ASSETS, AND CONCENTRATIONS OF CREDIT RISK - Additional Impaired Loan Information (Details) - USD ($) $ in Millions		3 Months Ended
		Mar. 31, 2016	Mar. 31, 2015
Financing Receivable, Recorded Investment, Past Due [Line Items]
Interest Income Recognized		$ 8	$ 12
Average Recorded Investment		1,028	1,381
Commercial Banking
Financing Receivable, Recorded Investment, Past Due [Line Items]
Interest Income Recognized		1	1
Average Recorded Investment		267	193
Commercial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Interest Income Recognized		1	1
Average Recorded Investment		201	142
Commercial real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Interest Income Recognized		0	0
Average Recorded Investment		66	51
Retail
Financing Receivable, Recorded Investment, Past Due [Line Items]
Interest Income Recognized		7	11
Average Recorded Investment		761	1,188
Residential mortgages
Financing Receivable, Recorded Investment, Past Due [Line Items]
Interest Income Recognized		1	4
Average Recorded Investment		142	441
Home equity loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Interest Income Recognized		2	2
Average Recorded Investment		134	268
Home equity lines of credit
Financing Receivable, Recorded Investment, Past Due [Line Items]
Interest Income Recognized		1	1
Average Recorded Investment		187	156
Home equity loans serviced by others
Financing Receivable, Recorded Investment, Past Due [Line Items]
Interest Income Recognized	[1]	1	1
Average Recorded Investment	[1]	71	88
Home equity lines of credit serviced by others
Financing Receivable, Recorded Investment, Past Due [Line Items]
Interest Income Recognized	[1]	0	0
Average Recorded Investment	[1]	10	11
Automobile
Financing Receivable, Recorded Investment, Past Due [Line Items]
Interest Income Recognized		0	0
Average Recorded Investment		13	11
Student
Financing Receivable, Recorded Investment, Past Due [Line Items]
Interest Income Recognized		2	2
Average Recorded Investment		163	164
Credit cards
Financing Receivable, Recorded Investment, Past Due [Line Items]
Interest Income Recognized		0	1
Average Recorded Investment		27	30
Other retail
Financing Receivable, Recorded Investment, Past Due [Line Items]
Interest Income Recognized		0	0
Average Recorded Investment		$ 14	$ 19

[1] The Company’s SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

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ALLOWANCE FOR CREDIT LOSSES, NONPERFORMING ASSETS, AND CONCENTRATIONS OF CREDIT RISK - Troubled Debt Restructuring (Details) $ in Millions		3 Months Ended
		Mar. 31, 2016 USD ($) contract	Mar. 31, 2015 USD ($) contract
Financing Receivable, Modifications [Line Items]
Net Change to ALLL Resulting from Modification		$ 0	$ 0
Charge-offs Resulting from Modification		18	3
Commercial Banking
Financing Receivable, Modifications [Line Items]
Net Change to ALLL Resulting from Modification		(1)	(1)
Charge-offs Resulting from Modification		18	0
Commercial
Financing Receivable, Modifications [Line Items]
Net Change to ALLL Resulting from Modification		(1)	(1)
Charge-offs Resulting from Modification		18	0
Commercial real estate
Financing Receivable, Modifications [Line Items]
Net Change to ALLL Resulting from Modification		0	0
Charge-offs Resulting from Modification		0	0
Retail
Financing Receivable, Modifications [Line Items]
Net Change to ALLL Resulting from Modification		1	1
Charge-offs Resulting from Modification		0	3
Residential mortgages
Financing Receivable, Modifications [Line Items]
Net Change to ALLL Resulting from Modification		0	(1)
Charge-offs Resulting from Modification		0	0
Home equity loans
Financing Receivable, Modifications [Line Items]
Net Change to ALLL Resulting from Modification		0	0
Charge-offs Resulting from Modification		0	0
Home equity lines of credit
Financing Receivable, Modifications [Line Items]
Net Change to ALLL Resulting from Modification		0	0
Charge-offs Resulting from Modification		0	1
Home equity loans serviced by others
Financing Receivable, Modifications [Line Items]
Net Change to ALLL Resulting from Modification	[1]	0	0
Charge-offs Resulting from Modification	[1]	0	1
Home equity lines of credit serviced by others
Financing Receivable, Modifications [Line Items]
Net Change to ALLL Resulting from Modification	[1]	0	0
Charge-offs Resulting from Modification	[1]	0	0
Automobile
Financing Receivable, Modifications [Line Items]
Net Change to ALLL Resulting from Modification		0	0
Charge-offs Resulting from Modification		0	1
Student
Financing Receivable, Modifications [Line Items]
Net Change to ALLL Resulting from Modification		1	2
Charge-offs Resulting from Modification		0	0
Credit cards
Financing Receivable, Modifications [Line Items]
Net Change to ALLL Resulting from Modification		0
Charge-offs Resulting from Modification		0
Other retail
Financing Receivable, Modifications [Line Items]
Net Change to ALLL Resulting from Modification		0	0
Charge-offs Resulting from Modification		$ 0	$ 0
Interest Rate Reduction
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	[2]	601	702
Pre-Modification Outstanding Recorded Investment	[2]	$ 10	$ 13
Post-Modification Outstanding Recorded Investment	[2]	$ 10	$ 13
Interest Rate Reduction | Commercial Banking
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	[2]	5	7
Pre-Modification Outstanding Recorded Investment	[2]	$ 1	$ 1
Post-Modification Outstanding Recorded Investment	[2]	$ 1	$ 1
Interest Rate Reduction | Commercial
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	[2]	5	6
Pre-Modification Outstanding Recorded Investment	[2]	$ 1	$ 1
Post-Modification Outstanding Recorded Investment	[2]	$ 1	$ 1
Interest Rate Reduction | Commercial real estate
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	[2]	0	1
Pre-Modification Outstanding Recorded Investment	[2]	$ 0	$ 0
Post-Modification Outstanding Recorded Investment	[2]	$ 0	$ 0
Interest Rate Reduction | Retail
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	[2]	596	695
Pre-Modification Outstanding Recorded Investment	[2]	$ 9	$ 12
Post-Modification Outstanding Recorded Investment	[2]	$ 9	$ 12
Interest Rate Reduction | Residential mortgages
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	[2]	22	33
Pre-Modification Outstanding Recorded Investment	[2]	$ 3	$ 6
Post-Modification Outstanding Recorded Investment	[2]	$ 3	$ 6
Interest Rate Reduction | Home equity loans
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	[2]	14	21
Pre-Modification Outstanding Recorded Investment	[2]	$ 1	$ 1
Post-Modification Outstanding Recorded Investment	[2]	$ 1	$ 1
Interest Rate Reduction | Home equity lines of credit
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	[2]	7	0
Pre-Modification Outstanding Recorded Investment	[2]	$ 1	$ 0
Post-Modification Outstanding Recorded Investment	[2]	$ 1	$ 0
Interest Rate Reduction | Home equity loans serviced by others
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	[1],[2]	3	17
Pre-Modification Outstanding Recorded Investment	[1],[2]	$ 0	$ 1
Post-Modification Outstanding Recorded Investment	[1],[2]	$ 0	$ 1
Interest Rate Reduction | Home equity lines of credit serviced by others
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	[1],[2]	0
Pre-Modification Outstanding Recorded Investment	[1],[2]	$ 0
Post-Modification Outstanding Recorded Investment	[1],[2]	$ 0
Interest Rate Reduction | Automobile
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	[2]	21	20
Pre-Modification Outstanding Recorded Investment	[2]	$ 1	$ 1
Post-Modification Outstanding Recorded Investment	[2]	$ 1	$ 1
Interest Rate Reduction | Student
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	[2]	0
Pre-Modification Outstanding Recorded Investment	[2]	$ 0
Post-Modification Outstanding Recorded Investment	[2]	$ 0
Interest Rate Reduction | Credit cards
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	[2]	529	604
Pre-Modification Outstanding Recorded Investment	[2]	$ 3	$ 3
Post-Modification Outstanding Recorded Investment	[2]	$ 3	$ 3
Interest Rate Reduction | Other retail
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	[2]	0
Pre-Modification Outstanding Recorded Investment	[2]	$ 0
Post-Modification Outstanding Recorded Investment	[2]	$ 0
Maturity Extension
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	[3]	73	79
Pre-Modification Outstanding Recorded Investment	[3]	$ 9	$ 17
Post-Modification Outstanding Recorded Investment	[3]	$ 9	$ 17
Maturity Extension | Commercial Banking
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	[3]	26	28
Pre-Modification Outstanding Recorded Investment	[3]	$ 4	$ 10
Post-Modification Outstanding Recorded Investment	[3]	$ 4	$ 10
Maturity Extension | Commercial
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	[3]	26	28
Pre-Modification Outstanding Recorded Investment	[3]	$ 4	$ 10
Post-Modification Outstanding Recorded Investment	[3]	$ 4	$ 10
Maturity Extension | Commercial real estate
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	[3]	0	0
Pre-Modification Outstanding Recorded Investment	[3]	$ 0	$ 0
Post-Modification Outstanding Recorded Investment	[3]	$ 0	$ 0
Maturity Extension | Retail
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	[3]	47	51
Pre-Modification Outstanding Recorded Investment	[3]	$ 5	$ 7
Post-Modification Outstanding Recorded Investment	[3]	$ 5	$ 7
Maturity Extension | Residential mortgages
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	[3]	6	10
Pre-Modification Outstanding Recorded Investment	[3]	$ 1	$ 2
Post-Modification Outstanding Recorded Investment	[3]	$ 1	$ 2
Maturity Extension | Home equity loans
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	[3]	16	37
Pre-Modification Outstanding Recorded Investment	[3]	$ 2	$ 5
Post-Modification Outstanding Recorded Investment	[3]	$ 2	$ 5
Maturity Extension | Home equity lines of credit
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	[3]	19	3
Pre-Modification Outstanding Recorded Investment	[3]	$ 2	$ 0
Post-Modification Outstanding Recorded Investment	[3]	$ 2	$ 0
Maturity Extension | Home equity loans serviced by others
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	[1],[3]	0	0
Pre-Modification Outstanding Recorded Investment	[1],[3]	$ 0	$ 0
Post-Modification Outstanding Recorded Investment	[1],[3]	$ 0	$ 0
Maturity Extension | Home equity lines of credit serviced by others
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	[1],[3]	1
Pre-Modification Outstanding Recorded Investment	[1],[3]	$ 0
Post-Modification Outstanding Recorded Investment	[1],[3]	$ 0
Maturity Extension | Automobile
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	[3]	5	1
Pre-Modification Outstanding Recorded Investment	[3]	$ 0	$ 0
Post-Modification Outstanding Recorded Investment	[3]	$ 0	$ 0
Maturity Extension | Student
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	[3]	0
Pre-Modification Outstanding Recorded Investment	[3]	$ 0
Post-Modification Outstanding Recorded Investment	[3]	$ 0
Maturity Extension | Credit cards
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	[3]	0	0
Pre-Modification Outstanding Recorded Investment	[3]	$ 0	$ 0
Post-Modification Outstanding Recorded Investment	[3]	$ 0	$ 0
Maturity Extension | Other retail
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	[3]	0
Pre-Modification Outstanding Recorded Investment	[3]	$ 0
Post-Modification Outstanding Recorded Investment	[3]	$ 0
Other
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	[4]	594	1,140
Pre-Modification Outstanding Recorded Investment	[4]	$ 45	$ 45
Post-Modification Outstanding Recorded Investment	[4]	$ 44	$ 42
Other | Commercial Banking
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	[4]	5	2
Pre-Modification Outstanding Recorded Investment	[4]	$ 21	$ 6
Post-Modification Outstanding Recorded Investment	[4]	$ 20	$ 6
Other | Commercial
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	[4]	5	1
Pre-Modification Outstanding Recorded Investment	[4]	$ 21	$ 2
Post-Modification Outstanding Recorded Investment	[4]	$ 20	$ 2
Other | Commercial real estate
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	[4]	0	1
Pre-Modification Outstanding Recorded Investment	[4]	$ 0	$ 4
Post-Modification Outstanding Recorded Investment	[4]	$ 0	$ 4
Other | Retail
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	[4]	589	1,138
Pre-Modification Outstanding Recorded Investment	[4]	$ 24	$ 39
Post-Modification Outstanding Recorded Investment	[4]	$ 24	$ 36
Other | Residential mortgages
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	[4]	64	64
Pre-Modification Outstanding Recorded Investment	[4]	$ 8	$ 6
Post-Modification Outstanding Recorded Investment	[4]	$ 8	$ 6
Other | Home equity loans
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	[4]	87	197
Pre-Modification Outstanding Recorded Investment	[4]	$ 6	$ 10
Post-Modification Outstanding Recorded Investment	[4]	$ 6	$ 10
Other | Home equity lines of credit
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	[4]	32	135
Pre-Modification Outstanding Recorded Investment	[4]	$ 2	$ 8
Post-Modification Outstanding Recorded Investment	[4]	$ 2	$ 7
Other | Home equity loans serviced by others
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	[1],[4]	18	46
Pre-Modification Outstanding Recorded Investment	[1],[4]	$ 1	$ 2
Post-Modification Outstanding Recorded Investment	[1],[4]	$ 1	$ 2
Other | Home equity lines of credit serviced by others
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	[1],[4]	8	7
Pre-Modification Outstanding Recorded Investment	[1],[4]	$ 0	$ 0
Post-Modification Outstanding Recorded Investment	[1],[4]	$ 0	$ 0
Other | Automobile
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	[4]	191	297
Pre-Modification Outstanding Recorded Investment	[4]	$ 3	$ 5
Post-Modification Outstanding Recorded Investment	[4]	$ 3	$ 4
Other | Student
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	[4]	186	381
Pre-Modification Outstanding Recorded Investment	[4]	$ 4	$ 8
Post-Modification Outstanding Recorded Investment	[4]	$ 4	$ 7
Other | Credit cards
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	[4]	0
Pre-Modification Outstanding Recorded Investment	[4]	$ 0
Post-Modification Outstanding Recorded Investment	[4]	$ 0
Other | Other retail
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	[4]	3	11
Pre-Modification Outstanding Recorded Investment	[4]	$ 0	$ 0
Post-Modification Outstanding Recorded Investment	[4]	$ 0	$ 0

[1] The Company’s SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

[2] Includes modifications that consist of multiple concessions, one of which is an interest rate reduction.

[3] Includes modifications that consist of multiple concessions, one of which is a maturity extension (unless one of the other concessions was an interest rate reduction).

[4] Includes modifications other than interest rate reductions or maturity extensions, such as lowering scheduled payments for a specified period of time, principal forbearance, capitalizing arrearages, and principal forgiveness. Also included are the following: deferrals, trial modifications, certain bankruptcies, loans in forbearance and prepayment plans. Modifications can include the deferral of accrued interest resulting in post modification balances being higher than pre-modification.

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ALLOWANCE FOR CREDIT LOSSES, NONPERFORMING ASSETS, AND CONCENTRATIONS OF CREDIT RISK - Default of Modified Debt Agreements (Details) $ in Millions		3 Months Ended
		Mar. 31, 2016 USD ($) contract	Mar. 31, 2015 USD ($) contract
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract		295	355
Balance Defaulted | $		$ 16	$ 15
Commercial Banking
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract		3	6
Balance Defaulted | $		$ 0	$ 0
Commercial
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract		3	6
Balance Defaulted | $		$ 0	$ 0
Commercial real estate
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract		0	0
Balance Defaulted | $		$ 0	$ 0
Retail
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract		292	349
Balance Defaulted | $		$ 16	$ 15
Residential mortgages
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract		54	49
Balance Defaulted | $		$ 8	$ 7
Home equity loans
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract		49	51
Balance Defaulted | $		$ 3	$ 3
Home equity lines of credit
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract		25	40
Balance Defaulted | $		$ 3	$ 2
Home equity loans serviced by others
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	[1]	10	16
Balance Defaulted | $	[1]	$ 1	$ 0
Home equity lines of credit serviced by others
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	[1]	5	1
Balance Defaulted | $	[1]	$ 0	$ 0
Automobile
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract		15	23
Balance Defaulted | $		$ 0	$ 0
Student
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract		13	65
Balance Defaulted | $		$ 0	$ 2
Credit cards
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract		121	102
Balance Defaulted | $		$ 1	$ 1
Other retail
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract		0	2
Balance Defaulted | $		$ 0	$ 0

[1] The Company’s SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

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ALLOWANCE FOR CREDIT LOSSES, NONPERFORMING ASSETS, AND CONCENTRATIONS OF CREDIT RISK - Loans with Indicators of High Credit Risk (Details) - USD ($) $ in Millions	Mar. 31, 2016	Dec. 31, 2015
High loan-to-value
Financing Receivable, Recorded Investment [Line Items]
Total	$ 2,029	$ 2,472
High loan-to-value | Residential Mortgages
Financing Receivable, Recorded Investment [Line Items]
Total	519	649
High loan-to-value | Home Equity Loans and Lines of Credit
Financing Receivable, Recorded Investment [Line Items]
Total	815	1,038
High loan-to-value | Home Equity Products Serviced by Others
Financing Receivable, Recorded Investment [Line Items]
Total	695	785
High loan-to-value | Credit Cards
Financing Receivable, Recorded Investment [Line Items]
Total	0	0
High loan-to-value | Student
Financing Receivable, Recorded Investment [Line Items]
Total	0	0
Interest only/negative amortization
Financing Receivable, Recorded Investment [Line Items]
Total	1,182	1,110
Interest only/negative amortization | Residential Mortgages
Financing Receivable, Recorded Investment [Line Items]
Total	1,181	1,110
Interest only/negative amortization | Home Equity Loans and Lines of Credit
Financing Receivable, Recorded Investment [Line Items]
Total	0	0
Interest only/negative amortization | Home Equity Products Serviced by Others
Financing Receivable, Recorded Investment [Line Items]
Total	0	0
Interest only/negative amortization | Credit Cards
Financing Receivable, Recorded Investment [Line Items]
Total	0	0
Interest only/negative amortization | Student
Financing Receivable, Recorded Investment [Line Items]
Total	1	0
Low introductory rate
Financing Receivable, Recorded Investment [Line Items]
Total	93	99
Low introductory rate | Residential Mortgages
Financing Receivable, Recorded Investment [Line Items]
Total	0	0
Low introductory rate | Home Equity Loans and Lines of Credit
Financing Receivable, Recorded Investment [Line Items]
Total	0	3
Low introductory rate | Home Equity Products Serviced by Others
Financing Receivable, Recorded Investment [Line Items]
Total	0	0
Low introductory rate | Credit Cards
Financing Receivable, Recorded Investment [Line Items]
Total	93	96
Low introductory rate | Student
Financing Receivable, Recorded Investment [Line Items]
Total	0	0
Multiple characteristics and other
Financing Receivable, Recorded Investment [Line Items]
Total	4	14
Multiple characteristics and other | Residential Mortgages
Financing Receivable, Recorded Investment [Line Items]
Total	4	14
Multiple characteristics and other | Home Equity Loans and Lines of Credit
Financing Receivable, Recorded Investment [Line Items]
Total	0	0
Multiple characteristics and other | Home Equity Products Serviced by Others
Financing Receivable, Recorded Investment [Line Items]
Total	0	0
Multiple characteristics and other | Credit Cards
Financing Receivable, Recorded Investment [Line Items]
Total	0	0
Multiple characteristics and other | Student
Financing Receivable, Recorded Investment [Line Items]
Total	0	0
Credit risk, loans with increased credit exposure
Financing Receivable, Recorded Investment [Line Items]
Total	3,308	3,695
Credit risk, loans with increased credit exposure | Residential Mortgages
Financing Receivable, Recorded Investment [Line Items]
Total	1,704	1,773
Credit risk, loans with increased credit exposure | Home Equity Loans and Lines of Credit
Financing Receivable, Recorded Investment [Line Items]
Total	815	1,041
Credit risk, loans with increased credit exposure | Home Equity Products Serviced by Others
Financing Receivable, Recorded Investment [Line Items]
Total	695	785
Credit risk, loans with increased credit exposure | Credit Cards
Financing Receivable, Recorded Investment [Line Items]
Total	93	96
Credit risk, loans with increased credit exposure | Student
Financing Receivable, Recorded Investment [Line Items]
Total	$ 1	$ 0

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VARIABLE INTEREST ENTITIES - Narrative (Details) - LIHTC Investments - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Variable Interest Entity [Line Items]
Amortization method qualified affordable housing project investments, amortization	$ 15,000,000	$ 12,000,000
Affordable housing tax credits and other tax benefits, amount	15,000,000	11,000,000
Other tax expense (benefit)	(6,000,000)	(4,000,000)
Net impairment losses recognized in earnings	$ 0	$ 0

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VARIABLE INTEREST ENTITIES - Schedule of Variable Interest Entities (Details) - USD ($) $ in Millions	Mar. 31, 2016	Dec. 31, 2015
LIHTC Investments
Variable Interest Entity [Line Items]
LIHTC investment included in other assets	$ 642	$ 598
LIHTC unfunded commitments included in other liabilities	377	365
Renewable Energy
Variable Interest Entity [Line Items]
Renewable energy investments included in other assets	$ 118	$ 118

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MORTGAGE BANKING - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Proceeds from sale of residential mortgages	$ 479	$ 462
Repurchased mortgage loans	2	4
Mortgage servicing fees	13	14
Mortgage servicing rights valuation charge-off (recovery)	5	(1)
Residential mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
Proceeds from sale of residential mortgages	479	747
Gain on sale of residential mortgages	$ 14	$ 21

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MORTGAGE BANKING - Changes Related to MSRs (Details) - Residential mortgages - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
MSRs
Balance as of January 1	$ 173	$ 184
Amount capitalized	5	6
Amortization	(9)	(10)
Carrying amount before valuation allowance	169	180
Valuation allowance for servicing assets
Balance as of January 1	9	18
Valuation charge-offs (recoveries)	5	(1)
Balance at end of period	14	17
Net carrying value of MSRs	$ 155	$ 163

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MORTGAGE BANKING - Economic Assumptions Used to Estimate Value of MSRs (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Servicing Assets and Servicing Liabilities at Fair Value, Assumptions Used to Estimate Fair Value [Abstract]
Weighted average life (in years)	4 years 10 months 24 days	5 years 4 months 24 days
Weighted average constant prepayment rate	13.30%	11.60%
Weighted average discount rate	9.70%	9.70%
Residential mortgages
Servicing Assets and Servicing Liabilities at Fair Value, Assumptions Used to Estimate Fair Value [Abstract]
Fair value	$ 168	$ 178
Weighted average life (in years)	4 years 10 months 24 days	5 years 4 months 24 days
Weighted average constant prepayment rate	13.30%	11.60%
Weighted average discount rate	9.70%	9.70%

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MORTGAGE BANKING - Economic Assumptions Used to Estimate Value of MSRs Capitalized (Details) - Residential mortgages	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Servicing Assets at Fair Value [Line Items]
Weighted average life (in years)	6 years 1 month 6 days	4 years 8 months 12 days
Weighted average constant prepayment rate	11.00%	12.20%
Weighted average discount rate	9.80%	9.60%

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MORTGAGE BANKING - Sensitivity Analysis (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Minimum
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
Adverse change in basis points	0.50%	0.50%
Maximum
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
Adverse change in basis points	1.00%	1.00%
Prepayment rate
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
Decline in fair value from a 50 basis point decrease in interest rates	$ 6	$ 5
Decline in fair value from a 100 basis point decrease in interest rates	14	11
Weighted average discount rate
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
Decline in fair value from a 50 basis point increase in weighted average discount rate	3	3
Decline in fair value from a 100 basis point increase in weighted average discount rate	$ 5	$ 6

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BORROWED FUNDS - Narrative (Details) - USD ($) $ in Millions	Mar. 31, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
Short-term borrowed funds	$ 4,014	$ 3,432
Federal Home Loan Bank Advances and Letters of Credit | Secured Debt
Debt Instrument [Line Items]
Short-term borrowed funds	12,100	11,300
Federal Home Loan advances
Debt Instrument [Line Items]
Available borrowing capacity	3,500	$ 4,100
Federal Reserve Bank advances
Debt Instrument [Line Items]
Available borrowing capacity	$ 31,600

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BORROWED FUNDS - Short Term Debt (Details) - USD ($) $ in Millions	Mar. 31, 2016	Dec. 31, 2015
Short-term Debt [Line Items]
Total short-term borrowed funds	$ 4,014	$ 3,432
Federal funds purchased
Short-term Debt [Line Items]
Total short-term borrowed funds	23	0
Securities sold under agreements to repurchase
Short-term Debt [Line Items]
Total short-term borrowed funds	691	802
Other short-term borrowed funds (primarily current portion of FHLB advances)
Short-term Debt [Line Items]
Total short-term borrowed funds	$ 3,300	$ 2,630

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BORROWED FUNDS - Short Term Borrowed Debt Key Data (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Federal funds purchased and securities sold under agreements to repurchase
Short-term Debt [Line Items]
Weighted-average interest rate at period end	0.01%	0.15%
Maximum amount outstanding at month-end during the period	$ 1,274	$ 5,375
Average amount outstanding during the period	$ 881	$ 3,364
Weighted-average interest rate during the period	0.06%	0.22%
Other short-term borrowed funds (primarily current portion of FHLB advances)
Short-term Debt [Line Items]
Weighted-average interest rate at period end	0.57%	0.44%
Maximum amount outstanding at month-end during the period	$ 3,300	$ 7,004
Average amount outstanding during the period	$ 3,098	$ 5,865
Weighted-average interest rate during the period	0.58%	0.28%

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BORROWED FUNDS - Long Term Debt (Details) - USD ($) $ in Millions		Mar. 07, 2016	Mar. 31, 2016		Dec. 31, 2015	Aug. 03, 2015
Debt Instrument [Line Items]
Long-term borrowed funds			$ 10,035		$ 9,886
Interest rate swaps			(1,192)		(807)
Interest rate swaps
Debt Instrument [Line Items]
Interest rate swaps			(1,035)		(636)
Subordinated Debt | 4.350% fixed rate subordinated debt, due 2025
Debt Instrument [Line Items]
Interest rate						4.35%
Citizens Financial Group, Inc.
Debt Instrument [Line Items]
Long-term borrowed funds			2,487
Citizens Financial Group, Inc. | Subordinated Debt | 4.150% fixed rate subordinated debt, due 2022
Debt Instrument [Line Items]
Long-term borrowed funds	[1]		$ 347		350
Interest rate	[1]		4.15%
Principal balance			$ 350		350
Unamortized deferred issuance costs and discount			(3)
Citizens Financial Group, Inc. | Subordinated Debt | 5.158% fixed-to-floating rate subordinated debt, (LIBOR 3.56%) callable, due 2023
Debt Instrument [Line Items]
Long-term borrowed funds	[2]		$ 333		333
Interest rate	[2]		5.158%
Citizens Financial Group, Inc. | Subordinated Debt | 3.750% fixed rate subordinated debt due 2024
Debt Instrument [Line Items]
Long-term borrowed funds	[2],[3]		$ 250		$ 250
Interest rate	[2]		3.75%	[3]	4.153%
Citizens Financial Group, Inc. | Subordinated Debt | 4.023% fixed rate subordinated debt, due 2024
Debt Instrument [Line Items]
Long-term borrowed funds	[2],[4]		$ 214		$ 331
Interest rate	[2],[4]		4.023%
Principal balance			$ 208		333
Extinguishment of debt, amount		$ 125
Citizens Financial Group, Inc. | Subordinated Debt | 4.082% fixed rate subordinated debt, due 2025
Debt Instrument [Line Items]
Long-term borrowed funds	[2],[5]		$ 346		331
Interest rate	[2],[5]		4.082%
Principal balance			$ 334		334
Citizens Financial Group, Inc. | Subordinated Debt | 4.350% fixed rate subordinated debt, due 2025
Debt Instrument [Line Items]
Long-term borrowed funds	[6]		$ 248		250
Interest rate	[6]		4.35%
Principal balance			$ 250		250
Unamortized deferred issuance costs and discount			(2)
Citizens Financial Group, Inc. | Subordinated Debt | 4.300% fixed rate subordinated debt, due 2025
Debt Instrument [Line Items]
Long-term borrowed funds	[7]		$ 749		750
Interest rate	[7]		4.30%
Principal balance			$ 750		750
Unamortized deferred issuance costs and discount			$ (1)
Citizens Financial Group, Inc. | Subordinated Debt | LIBOR | 5.158% fixed-to-floating rate subordinated debt, (LIBOR 3.56%) callable, due 2023
Debt Instrument [Line Items]
Interest rate	[2]		3.56%
Citizens Financial Group, Inc. | Senior Unsecured Notes | Interest rate swaps | 4.023% fixed rate subordinated debt, due 2024
Debt Instrument [Line Items]
Interest rate swaps			$ 6		(2)
Citizens Financial Group, Inc. | Senior Unsecured Notes | Interest rate swaps | 4.082% fixed rate subordinated debt, due 2025
Debt Instrument [Line Items]
Interest rate swaps			12		(3)
Banking Subsidiaries
Debt Instrument [Line Items]
Long-term borrowed funds			7,548
Banking Subsidiaries | Senior Unsecured Notes | 1.600% senior unsecured notes, due 2017
Debt Instrument [Line Items]
Long-term borrowed funds	[8],[9]		$ 752		749
Interest rate	[8],[9]		1.60%
Principal balance			$ 750		750
Unamortized deferred issuance costs and discount			(1)
Banking Subsidiaries | Senior Unsecured Notes | 2.300% senior unsecured notes, due 2018
Debt Instrument [Line Items]
Long-term borrowed funds	[9],[10]		$ 753		747
Interest rate	[9],[10]		2.30%
Principal balance			$ 750		750
Unamortized deferred issuance costs and discount			(3)
Banking Subsidiaries | Senior Unsecured Notes | 2.450% senior unsecured notes, due 2019
Debt Instrument [Line Items]
Long-term borrowed funds	[9],[11]		$ 763		752
Interest rate	[9],[11]		2.45%
Principal balance			$ 750		750
Unamortized deferred issuance costs and discount			(3)
Banking Subsidiaries | Senior Unsecured Notes | 2.500% senior unsecured notes, due 2019
Debt Instrument [Line Items]
Long-term borrowed funds	[9],[12]		$ 750		0
Interest rate	[9],[12]		2.50%
Principal balance			$ 750
Unamortized deferred issuance costs and discount			(2)
Banking Subsidiaries | Senior Unsecured Notes | Interest rate swaps | 1.600% senior unsecured notes, due 2017
Debt Instrument [Line Items]
Interest rate swaps			3		(1)
Banking Subsidiaries | Senior Unsecured Notes | Interest rate swaps | 2.300% senior unsecured notes, due 2018
Debt Instrument [Line Items]
Interest rate swaps			6		(3)
Banking Subsidiaries | Senior Unsecured Notes | Interest rate swaps | 2.450% senior unsecured notes, due 2019
Debt Instrument [Line Items]
Interest rate swaps			16		2
Banking Subsidiaries | Senior Unsecured Notes | Interest rate swaps | 2.500% senior unsecured notes, due 2019
Debt Instrument [Line Items]
Interest rate swaps			2
Banking Subsidiaries | Federal Home Loan advances
Debt Instrument [Line Items]
Long-term borrowed funds			4,516		5,018
Banking Subsidiaries | Other
Debt Instrument [Line Items]
Long-term borrowed funds			$ 14		$ 25

[1] These balances are comprised of: principal balances of $350 million at March 31, 2016 and December 31, 2015, as well as the impact of ($3) million of unamortized deferred issuance costs and discount at March 31, 2016.

[2] Borrowed funds with RBS. See Note 13 “Related Party Transactions and Significant Transactions with RBS” for further information.

[3] Prior to January 1, 2016, interest was payable at a fixed rate per annum of 4.153%.

[4] These balances are comprised of: principal balance of $208 million and $333 million at March 31, 2016 and December 31, 2015, respectively, as well as the impact from interest rate swaps of $6 million and ($2) million at March 31, 2016 and December 31, 2015, respectively. See Note 11 “Derivatives” for further information. In addition, on March 7, 2016, the Company repurchased $125 million of these securities from RBS. See Note 13 “Related Party Transactions and Significant Transactions with RBS” for further information.

[5] These balances are comprised of: principal balance of $334 million at March 31, 2016 and December 31, 2015; impact from interest rate swaps of $12 million and ($3) million at March 31, 2016 and December 31, 2015, respectively. See Note 11 “Derivatives” for further information.

[6] These balances are comprised of: principal balances of $250 million at March 31, 2016 and December 31, 2015, as well as the impact of ($2) million of unamortized deferred issuance costs and discount at March 31, 2016.

[7] These balances are comprised of: principal balances of $750 million at March 31, 2016 and December 31, 2015, as well as the impact of ($1) million of unamortized deferred issuance costs and discount at March 31, 2016.

[8] These balances are comprised of: principal balances of $750 million at March 31, 2016 and December 31, 2015; impact from interest rate swaps of $3 million and ($1) million at March 31, 2016 and December 31, 2015, respectively; and ($1) million of unamortized deferred issuance costs and discount at March 31, 2016. See Note 11 “Derivatives” for further information.

[9] These securities were offered under CBNA’s Global Bank Note Program dated December 1, 2014.

[10] These balances are comprised of: principal balances of $750 million at March 31, 2016 and December 31, 2015; impact from interest rate swaps of $6 million and ($3) million at March 31, 2016 and December 31, 2015, respectively; and ($3) million of unamortized deferred issuance costs and discount at March 31, 2016. See Note 11 “Derivatives” for further information.

[11] These balances are comprised of: principal balances of $750 million at March 31, 2016 and December 31, 2015; impact from interest rate swaps of $16 million and $2 million at March 31, 2016 and December 31, 2015, respectively; and ($3) million of unamortized deferred issuance costs and discount at March 31, 2016. See Note 11 “Derivatives” for further information.

[12] The balance is comprised of: principal balance of $750 million at March 31, 2016; impact from interest rate swaps of $2 million and $(2) million of unamortized deferred issuance costs and discount at March 31, 2016. See Note 11 “Derivatives” for further information.

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BORROWED FUNDS - Maturities of Long-term Borrowed Funds (Details) - USD ($) $ in Millions	Mar. 31, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
2017 or on demand	$ 5,256
2018	759
2019	1,514
2020	2
2021	5
2022 and thereafter	2,499
Total	10,035	$ 9,886
Citizens Financial Group, Inc.
Debt Instrument [Line Items]
2017 or on demand	0
2018	0
2019	0
2020	0
2021	0
2022 and thereafter	2,487
Total	2,487
Banking Subsidiaries
Debt Instrument [Line Items]
2017 or on demand	5,256
2018	759
2019	1,514
2020	2
2021	5
2022 and thereafter	12
Total	$ 7,548

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STOCKHOLDERS' EQUITY (Details) - USD ($)				3 Months Ended	12 Months Ended
	Aug. 03, 2015	Apr. 07, 2015	Apr. 06, 2015	Mar. 31, 2016	Dec. 31, 2015
Preferred Stock
Preferred stock, authorized (in shares)				100,000,000	100,000,000
Preferred stock, outstanding (in shares)				250,000	250,000
Preferred stock, par value (in dollars per share)				$ 25.00	$ 25.00
RBSG
Treasury Stock
Treasury stock purchased (in shares)	9,615,384	10,473,397
Treasury stock purchased, price per share (in dollars per share)	$ 26.00	$ 23.87
Cost of stock repurchase		$ 250,000,000
4.350% fixed rate subordinated debt, due 2025 | Subordinated Debt
Treasury Stock
Aggregate principal amount of debt	$ 250,000,000
Interest rate	4.35%
Series A Preferred Stock
Preferred Stock
Preferred stock, authorized (in shares)				250,000	250,000
Preferred stock, par value (in dollars per share)			$ 25.00	$ 25.00	$ 25.00
Preferred stock, issued			$ 250,000,000
Preferred stock, issued (in shares)			250,000	250,000	250,000
Preferred stock, dividend rate			5.50%
Preferred stock, liquidation preference (in dollars per share)			$ 1,000	$ 1,000	$ 1,000
Net proceeds from issuance of stock			$ 247,000,000
Preferred stock, redemption price per share (in dollars per share)			$ 1,000
Series A Preferred Stock | LIBOR
Preferred Stock
Preferred stock, dividend payment rate, basis spread on variable rate, beginning after April 6, 2020			3.96%
Deferred Compensation, Share-based Payments [Member]
Treasury Stock
Treasury stock purchased, price per share (in dollars per share)					$ 25.50
Cost of stock repurchase				$ 0	$ 22,000,000
Stock repurchased during period (in shares)					876,087

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EMPLOYEE BENEFITS Schedule of Net Periodic (Income) Cost (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 1	$ 1
Interest cost	12	12
Expected return on plan assets	(17)	(18)
Amortization of actuarial loss	4	4
Net periodic pension (income) cost	0	(1)
Qualified Plan
Defined Benefit Plan Disclosure [Line Items]
Service cost	1	1
Interest cost	11	11
Expected return on plan assets	(17)	(18)
Amortization of actuarial loss	4	3
Net periodic pension (income) cost	(1)	(3)
Non-Qualified Plan
Defined Benefit Plan Disclosure [Line Items]
Service cost	0	0
Interest cost	1	1
Expected return on plan assets	0	0
Amortization of actuarial loss	0	1
Net periodic pension (income) cost	$ 1	$ 2

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INCOME TAXES - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Income Tax Disclosure [Abstract]
Income tax expense	$ 109	$ 106
Effective income tax rate	32.90%	33.70%
Federal income tax rate	35.00%	35.00%
Deferred taxes, net	$ 852		$ 730

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DERIVATIVES - Narrative (Details) $ in Millions	Mar. 31, 2016 USD ($)
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Net gain (pre-tax) on derivatives expected to be reclassified in next 12 months	$ 1

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DERIVATIVES - Schedule of Derivative Instruments (Details) - USD ($) $ in Millions		Mar. 31, 2016	Dec. 31, 2015
Derivative Assets
Derivative assets		$ 1,192	$ 807
Less: Gross amounts offset in the Consolidated Balance Sheets	[1]	(123)	(178)
Less: Cash collateral applied	[1]	(1)	(4)
Total net derivative fair values presented in the Consolidated Balance Sheets	[2]	1,068	625
Derivative Liabilities
Derivative Liabilities		971	666
Less: Gross amounts offset in the Consolidated Balance Sheets	[1]	(123)	(178)
Less: Cash collateral applied	[1]	(16)	(3)
Total net derivative fair values presented in the Consolidated Balance Sheets	[2]	832	485
Derivatives not designated as hedging instruments:
Derivative Assets
Derivative assets		896	711
Derivative Liabilities
Derivative Liabilities		804	616
Interest rate swaps
Derivative Assets
Derivative assets		1,035	636
Derivative Liabilities
Derivative Liabilities		825	505
Interest rate swaps | Derivatives designated as hedging instruments:
Derivatives, Fair Value [Line Items]
Notional amount	[3]	14,000	16,750
Derivative Assets
Derivative assets		296	96
Derivative Liabilities
Derivative Liabilities		167	50
Interest rate swaps | Derivatives not designated as hedging instruments:
Derivatives, Fair Value [Line Items]
Notional amount	[3]	35,896	33,719
Derivative Assets
Derivative assets		739	540
Derivative Liabilities
Derivative Liabilities		658	455
Foreign exchange contracts
Derivative Assets
Derivative assets		146	163
Derivative Liabilities
Derivative Liabilities		138	156
Foreign exchange contracts | Derivatives not designated as hedging instruments:
Derivatives, Fair Value [Line Items]
Notional amount	[3]	8,928	8,366
Derivative Assets
Derivative assets		146	163
Derivative Liabilities
Derivative Liabilities		138	156
Other contracts
Derivative Assets
Derivative assets		11	8
Derivative Liabilities
Derivative Liabilities		8	5
Other contracts | Derivatives not designated as hedging instruments:
Derivatives, Fair Value [Line Items]
Notional amount	[3]	1,117	981
Derivative Assets
Derivative assets		11	8
Derivative Liabilities
Derivative Liabilities		$ 8	$ 5

[1] Amounts represent the impact of legally enforceable master netting agreements that allow the Company to settle positive and negative positions.

[2] The Company also offsets assets and liabilities associated with repurchase agreements on the Consolidated Balance Sheets. See Note 2 “Securities” for further information.

[3] The notional or contractual amount of interest rate derivatives and foreign exchange contracts is the amount upon which interest and other payments under the contract are based. Notional amounts are typically not exchanged. Therefore, notional amounts should not be taken as the measure of credit or market risk, as they do not measure the true economic risk of these contracts.

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DERIVATIVES - Schedule of Fair Value Hedges (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Derivative Instruments, Gain (Loss) [Line Items]
Derivative	$ 6	$ 4
Hedge of interest rate risk | Other Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative	52	9
Hedged Item	(52)	(9)
Hedge Ineffectiveness	$ 0	$ 0

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DERIVATIVES - Effect of Derivative Instruments on Net Income (Details) - USD ($) $ in Millions		3 Months Ended
		Mar. 31, 2016	Mar. 31, 2015
Derivative Instruments, Gain (Loss) [Line Items]
Amounts reclassified from OCI to interest income		$ 145	$ 159
Amounts reclassified from OCI to interest expense		(115)	(106)
Amount Reclassified from AOCI
Derivative Instruments, Gain (Loss) [Line Items]
Effective portion of gain (loss) recognized in OCI	[1]	54	104
Amount Reclassified from AOCI | Net Unrealized Gains (Losses) on Derivatives
Derivative Instruments, Gain (Loss) [Line Items]
Amounts reclassified from OCI to interest income	[2]	22	18
Amounts reclassified from OCI to interest expense	[2]	(8)	(15)
Ineffective portion of gain recognized in other income	[3]	$ 0	$ 1

[1] The cumulative effective gains and losses on the Company’s cash flow hedging activities are included on the accumulated other comprehensive loss line item on the Consolidated Balance Sheets.

[2] This amount includes both (a) the amortization of effective gains and losses associated with the Company’s terminated cash flow hedges and (b) the current reporting period’s interest settlements realized on the Company’s active cash flow hedges. Both (a) and (b) were previously included on the accumulated other comprehensive loss line item on the Consolidated Balance Sheets and were subsequently recorded as adjustments to the interest expense of the underlying hedged item.

[3] This amount represents the net ineffectiveness recorded during the reporting periods presented plus any amounts excluded from effectiveness testing. These amounts are reflected in the other income line item on the Consolidated Statements of Operations.

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DERIVATIVES - Effect of Customer Derivatives and Economic Hedges on Net Income (Details) - USD ($) $ in Millions		3 Months Ended
		Mar. 31, 2016	Mar. 31, 2015
Derivative Instruments, Gain (Loss) [Line Items]
Amounts Recognized in Noninterest Income		$ 6	$ 4
Customer derivative contracts | Noninterest Income | Interest rate swaps
Derivative Instruments, Gain (Loss) [Line Items]
Amounts Recognized in Noninterest Income	[1]	97	73
Customer derivative contracts | Noninterest Income | Foreign exchange contracts
Derivative Instruments, Gain (Loss) [Line Items]
Amounts Recognized in Noninterest Income	[1]	51	(35)
Customer derivative contracts | Mortgage Banking Fees | Residential loan commitments
Derivative Instruments, Gain (Loss) [Line Items]
Amounts Recognized in Noninterest Income	[2]	4	0
Economic hedges | Noninterest Income | Interest rate swaps
Derivative Instruments, Gain (Loss) [Line Items]
Amounts Recognized in Noninterest Income	[1]	(91)	(68)
Economic hedges | Foreign Exchange and Trade Finance Fees | Foreign exchange contracts
Derivative Instruments, Gain (Loss) [Line Items]
Amounts Recognized in Noninterest Income	[3]	(50)	35
Economic hedges | Mortgage Banking Fees | Forward sale contracts
Derivative Instruments, Gain (Loss) [Line Items]
Amounts Recognized in Noninterest Income	[2]	$ (5)	$ (1)

[1] Reported in other income on the Consolidated Statements of Operations.

[2] Reported in mortgage banking fees on the Consolidated Statements of Operations.

[3] Reported in foreign exchange and letter of credit fees on the Consolidated Statements of Operations.

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COMMITMENTS AND CONTINGENCIES - Narrative (Details)		3 Months Ended	9 Months Ended	12 Months Ended
	Jan. 07, 2016 USD ($)	Mar. 31, 2016 USD ($) counterparty	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2003	Nov. 30, 2015 USD ($)
Letters of Credit [Abstract]
Letters of credit outstanding		$ 3,000,000		$ 3,000,000
Risk Participation Agreements [Abstract]
Risk participation agreements		$ 53,000,000		26,000,000
Risk participation agreements number of counterparties | counterparty		89
Risk participation agreements, Maximum term		10 years
Commitments [Abstract]
Long-term borrowed funds		$ 10,035,000,000		9,886,000,000
Commercial real estate loans held for sale | Purchase commitment
Commitments [Abstract]
Unsettled commercial loan trade purchases		98,000,000
Unsettled commercial loan trade sales		125,000,000
Citizens Financial Group, Inc.
Commitments [Abstract]
Long-term borrowed funds		$ 2,487,000,000
Subordinated Debt | Citizens Financial Group, Inc. | Purchase commitment
Commitments [Abstract]
Long-term borrowed funds						$ 500,000,000
Minimum
Risk Participation Agreements [Abstract]
Risk participation agreements, Average term		1 year
Maximum
Risk Participation Agreements [Abstract]
Risk participation agreements, Average term		5 years
Marketing rights
Marketing Rights [Abstract]
Commitment period					25 years
Payments made		$ 0		$ 3,000,000
Remaining obligation due		47,000,000
Automobile | Minimum
Commitments [Abstract]
Purchase commitment, due after next twelve months		50,000,000
Automobile | Maximum
Commitments [Abstract]
Purchase commitment, due after next twelve months		$ 200,000,000
Student
Commitments [Abstract]
Termination fee	$ 1,000,000
Student | Minimum
Commitments [Abstract]
Purchase commitment, due in next twelve months	125,000,000
Aggregate purchase principal balance	500,000,000
Student | Maximum
Commitments [Abstract]
Aggregate purchase principal balance	$ 1,000,000,000
Financial standby letters of credit
Letters of Credit [Abstract]
Letters of credit terms		10 years
Commercial letters of credit
Letters of Credit [Abstract]
Letters of credit terms		1 year
Scenario, Forecast | Marketing rights
Marketing Rights [Abstract]
Payments made			$ 3,000,000

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COMMITMENTS AND CONTINGENCIES - Schedule of Outstanding Off-balance sheet Arrangements (Details) - USD ($) $ in Millions	Mar. 31, 2016	Dec. 31, 2015
Other Commitments [Line Items]
Commitment amount	$ 59,124	$ 58,746
Undrawn commitments to extend credit
Other Commitments [Line Items]
Commitment amount	56,989	56,524
Financial standby letters of credit
Other Commitments [Line Items]
Commitment amount	1,921	2,010
Performance letters of credit
Other Commitments [Line Items]
Commitment amount	41	42
Commercial letters of credit
Other Commitments [Line Items]
Commitment amount	63	87
Marketing rights
Other Commitments [Line Items]
Commitment amount	47	47
Risk participation agreements
Other Commitments [Line Items]
Commitment amount	53	26
Residential mortgage loans sold with recourse
Other Commitments [Line Items]
Commitment amount	$ 10	$ 10

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RELATED PARTY TRANSACTIONS AND SIGNIFICANT TRANSACTIONS WITH RBS - Narrative (Details) - USD ($)			3 Months Ended
	Mar. 07, 2016	Dec. 03, 2015	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015	Nov. 30, 2015
Related Party Transaction [Line Items]
Repurchase of long-term borrowed funds			$ 629,000,000	$ 3,000,000
Gain on extinguishment of debt		$ 3,000,000
Long-term borrowed funds			10,035,000,000		$ 9,886,000,000
RBSG
Related Party Transaction [Line Items]
Repurchase of long-term borrowed funds	$ 125,000,000	$ 750,000,000	125,000,000	0
Long-term borrowed funds			1,125,000,000		1,250,000,000
Payments of ordinary common stock dividends			0	$ 39,000,000
Executive Officers, Family Members, and Their Businesses
Related Party Transaction [Line Items]
Related party loans			126,000,000		$ 136,000,000
Citizens Financial Group, Inc.
Related Party Transaction [Line Items]
Long-term borrowed funds			$ 2,487,000,000
Purchase commitment | Subordinated Debt | Citizens Financial Group, Inc.
Related Party Transaction [Line Items]
Long-term borrowed funds						$ 500,000,000
Purchase commitment | Subordinated Debt | Citizens Financial Group, Inc. | Related Party Debt
Related Party Transaction [Line Items]
Long-term borrowed funds						$ 500,000,000

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RELATED PARTY TRANSACTIONS AND SIGNIFICANT TRANSACTIONS WITH RBS - Schedule of Related Party Debt Terms (Details) - USD ($) $ in Millions		Mar. 07, 2016	Mar. 31, 2016		Dec. 31, 2015
Related Party Transaction [Line Items]
Long-term borrowed funds			$ 10,035		$ 9,886
Citizens Financial Group, Inc.
Related Party Transaction [Line Items]
Long-term borrowed funds			$ 2,487
Subordinated Debt | 5.158% fixed-to-floating rate subordinated debt, (LIBOR 3.56%) callable, due 2023 | Citizens Financial Group, Inc.
Related Party Transaction [Line Items]
Interest rate	[1]		5.158%
Long-term borrowed funds	[1]		$ 333		$ 333
Subordinated Debt | 3.750% fixed rate subordinated debt due 2024 | Citizens Financial Group, Inc.
Related Party Transaction [Line Items]
Interest rate	[1]		3.75%	[2]	4.153%
Long-term borrowed funds	[1],[2]		$ 250		$ 250
Subordinated Debt | 4.023% fixed rate subordinated debt, due 2024 | Citizens Financial Group, Inc.
Related Party Transaction [Line Items]
Interest rate	[1],[3]		4.023%
Long-term borrowed funds	[1],[3]		$ 214		331
Extinguishment of debt, amount		$ 125
Subordinated Debt | 4.082% fixed rate subordinated debt, due 2025 | Citizens Financial Group, Inc.
Related Party Transaction [Line Items]
Interest rate	[1],[4]		4.082%
Long-term borrowed funds	[1],[4]		$ 346		331
RBSG
Related Party Transaction [Line Items]
Long-term borrowed funds			$ 1,125		$ 1,250
RBSG | Subordinated Debt | 5.158% fixed-to-floating rate subordinated debt, (LIBOR 3.56%) callable, due 2023
Related Party Transaction [Line Items]
Interest rate			5.158%		5.158%
Long-term borrowed funds			$ 333		$ 333
RBSG | Subordinated Debt | 3.750% fixed rate subordinated debt due 2024
Related Party Transaction [Line Items]
Interest rate			3.75%	[5]	4.153%
Long-term borrowed funds			$ 250		$ 250
RBSG | Subordinated Debt | 4.023% fixed rate subordinated debt, due 2024
Related Party Transaction [Line Items]
Interest rate			4.023%	[6]	4.023%
Long-term borrowed funds			$ 208		$ 333
RBSG | Subordinated Debt | 4.082% fixed rate subordinated debt, due 2025
Related Party Transaction [Line Items]
Interest rate			4.082%		4.082%
Long-term borrowed funds			$ 334		$ 334

[1] Borrowed funds with RBS. See Note 13 “Related Party Transactions and Significant Transactions with RBS” for further information.

[2] Prior to January 1, 2016, interest was payable at a fixed rate per annum of 4.153%.

[3] These balances are comprised of: principal balance of $208 million and $333 million at March 31, 2016 and December 31, 2015, respectively, as well as the impact from interest rate swaps of $6 million and ($2) million at March 31, 2016 and December 31, 2015, respectively. See Note 11 “Derivatives” for further information. In addition, on March 7, 2016, the Company repurchased $125 million of these securities from RBS. See Note 13 “Related Party Transactions and Significant Transactions with RBS” for further information.

[4] These balances are comprised of: principal balance of $334 million at March 31, 2016 and December 31, 2015; impact from interest rate swaps of $12 million and ($3) million at March 31, 2016 and December 31, 2015, respectively. See Note 11 “Derivatives” for further information.

[5] Prior to January 1, 2016, interest was payable at a fixed rate per annum of 4.153%.

[6] On March 7, 2016, the Company repurchased $125 million of these securities from RBS.

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RELATED PARTY TRANSACTIONS AND SIGNIFICANT TRANSACTIONS WITH RBS - Schedule of Related Party Transactions, Recorded Interest Expense (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Related Party Transactions [Abstract]
Interest expense on subordinated debt	$ 11	$ 20

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FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($)	1 Months Ended	3 Months Ended		12 Months Ended
	Mar. 31, 2015	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Mortgage banking (expense) income		$ 18,000,000	$ 33,000,000
Transfers from Level 3 to Level 2	$ 5,000,000
Weighted average life (in years)		4 years 10 months 24 days		5 years 4 months 24 days
Weighted average constant prepayment rate		13.30%		11.60%
Weighted average discount rate		9.70%		9.70%
Minimum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Weighted average life (in years)		2 years 7 months 6 days		2 years 9 months 18 days
Weighted average constant prepayment rate		12.40%		10.70%
Weighted average discount rate		9.10%		9.10%
Maximum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Weighted average life (in years)		5 years 7 months 6 days		6 years 2 months 12 days
Weighted average constant prepayment rate		22.30%		22.20%
Weighted average discount rate		12.10%		12.10%
Residential loans held for sale
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Mortgage banking (expense) income		$ 6,000,000	1,000,000
Commercial real estate loans held for sale
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans in this portfolio that were 90 days or more past due or nonaccruing		0
Other noninterest income		$ 0	$ 1,000,000

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FAIR VALUE MEASUREMENTS - Residential and Commercial Mortgage Loans Held For Sale (Details) - USD ($) $ in Millions	Mar. 31, 2016	Dec. 31, 2015
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Aggregate Fair Value	$ 365	$ 325
Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Aggregate Fair Value	365	325
Level 2 | Residential loans held for sale
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Aggregate Fair Value	292	268
Aggregate Unpaid Principal	281	263
Aggregate Fair Value Less Aggregate Unpaid Principal	11	5
Level 2 | Commercial real estate loans held for sale
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Aggregate Fair Value	73	57
Aggregate Unpaid Principal	73	57
Aggregate Fair Value Less Aggregate Unpaid Principal	$ 0	$ 0

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FAIR VALUE MEASUREMENTS - Schedule of Fair Value Measurements (Details) - USD ($) $ in Millions		Mar. 31, 2016	Dec. 31, 2015
Assets
Securities available for sale	[1]	$ 17,964	$ 17,884
Loans held for sale, at fair value		365	325
Derivative assets		1,192	807
Money market mutual fund		63	65
Other investments		5	5
Total other investment securities, at fair value		68	70
Total assets		19,589	19,086
Liabilities
Total derivative liabilities		971	666
Total liabilities		971	666
Interest rate swaps
Assets
Derivative assets		1,035	636
Liabilities
Total derivative liabilities		825	505
Foreign exchange contracts
Assets
Derivative assets		146	163
Liabilities
Total derivative liabilities		138	156
Other contracts
Assets
Derivative assets		11	8
Liabilities
Total derivative liabilities		8	5
Mortgage-backed securities
Assets
Securities available for sale		17,922	17,842
State and political subdivisions
Assets
Securities available for sale		9	9
Equity securities
Assets
Securities available for sale		17	17
U.S. Treasury and other
Assets
Securities available for sale		16	16
Residential loans held for sale
Assets
Loans held for sale, at fair value		292	268
Commercial loans held for sale
Assets
Loans held for sale, at fair value		73	57
Level 1
Assets
Securities available for sale		15	15
Loans held for sale, at fair value		0	0
Derivative assets		0	0
Money market mutual fund		63	65
Other investments		0	0
Total other investment securities, at fair value		63	65
Total assets		78	80
Liabilities
Total derivative liabilities		0	0
Total liabilities		0	0
Level 1 | Interest rate swaps
Assets
Derivative assets		0	0
Liabilities
Total derivative liabilities		0	0
Level 1 | Foreign exchange contracts
Assets
Derivative assets		0	0
Liabilities
Total derivative liabilities		0	0
Level 1 | Other contracts
Assets
Derivative assets		0	0
Liabilities
Total derivative liabilities		0	0
Level 1 | Mortgage-backed securities
Assets
Securities available for sale		0	0
Level 1 | State and political subdivisions
Assets
Securities available for sale		0	0
Level 1 | Equity securities
Assets
Securities available for sale		0	0
Level 1 | U.S. Treasury and other
Assets
Securities available for sale		15	15
Level 1 | Residential loans held for sale
Assets
Loans held for sale, at fair value		0	0
Level 1 | Commercial loans held for sale
Assets
Loans held for sale, at fair value		0	0
Level 2
Assets
Securities available for sale		17,949	17,869
Loans held for sale, at fair value		365	325
Derivative assets		1,192	807
Money market mutual fund		0	0
Other investments		5	5
Total other investment securities, at fair value		5	5
Total assets		19,511	19,006
Liabilities
Total derivative liabilities		971	666
Total liabilities		971	666
Level 2 | Interest rate swaps
Assets
Derivative assets		1,035	636
Liabilities
Total derivative liabilities		825	505
Level 2 | Foreign exchange contracts
Assets
Derivative assets		146	163
Liabilities
Total derivative liabilities		138	156
Level 2 | Other contracts
Assets
Derivative assets		11	8
Liabilities
Total derivative liabilities		8	5
Level 2 | Mortgage-backed securities
Assets
Securities available for sale		17,922	17,842
Level 2 | State and political subdivisions
Assets
Securities available for sale		9	9
Level 2 | Equity securities
Assets
Securities available for sale		17	17
Level 2 | U.S. Treasury and other
Assets
Securities available for sale		1	1
Level 2 | Residential loans held for sale
Assets
Loans held for sale, at fair value		292	268
Level 2 | Commercial loans held for sale
Assets
Loans held for sale, at fair value		73	57
Level 3
Assets
Securities available for sale		0	0
Loans held for sale, at fair value		0	0
Derivative assets		0	0
Money market mutual fund		0	0
Other investments		0	0
Total other investment securities, at fair value		0	0
Total assets		0	0
Liabilities
Total derivative liabilities		0	0
Total liabilities		0	0
Level 3 | Interest rate swaps
Assets
Derivative assets		0	0
Liabilities
Total derivative liabilities		0	0
Level 3 | Foreign exchange contracts
Assets
Derivative assets		0	0
Liabilities
Total derivative liabilities		0	0
Level 3 | Other contracts
Assets
Derivative assets		0	0
Liabilities
Total derivative liabilities		0	0
Level 3 | Mortgage-backed securities
Assets
Securities available for sale		0	0
Level 3 | State and political subdivisions
Assets
Securities available for sale		0	0
Level 3 | Equity securities
Assets
Securities available for sale		0	0
Level 3 | U.S. Treasury and other
Assets
Securities available for sale		0	0
Level 3 | Residential loans held for sale
Assets
Loans held for sale, at fair value		0	0
Level 3 | Commercial loans held for sale
Assets
Loans held for sale, at fair value		$ 0	$ 0

[1] Includes only collateral pledged by the Company where counterparties have the right to sell or pledge the collateral.

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FAIR VALUE MEASUREMENTS - Schedule of Changes in Level 3 (Details) - Recurring basis - Level 3 - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning as of January 1	$ 0	$ 5
Purchases	0	1
Sales	0	0
Settlements	0	0
Net (losses) gains	0	0
Transfers from Level 3 to Level 2	0	(5)
Balance as of period end	0	1
Net unrealized gain (loss) included in net income for the year relating to assets held at period end	$ 0	$ 1

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FAIR VALUE MEASUREMENTS - Schedule of Gain (Loss) on Assets and Liabilities Measured on Nonrecurring Basis Included in Earnings (Details) - Nonrecurring measurement basis - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Impaired collateral-dependent loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Gain (loss) included in earnings on assets measured on a nonrecurring basis	$ (5)	$ (3)
MSRs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Gain (loss) included in earnings on assets measured on a nonrecurring basis	(5)	1
Foreclosed assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Gain (loss) included in earnings on assets measured on a nonrecurring basis	$ (1)	$ (1)

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FAIR VALUE MEASUREMENTS - Schedule of Fair Value Measurements on a Nonrecurring Basis (Details) - Nonrecurring measurement basis - USD ($) $ in Millions	Mar. 31, 2016	Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired collateral-dependent loans	$ 39	$ 60
MSRs	168	178
Foreclosed assets	46	42
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired collateral-dependent loans	0	0
MSRs	0	0
Foreclosed assets	0	0
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired collateral-dependent loans	39	60
MSRs	0	0
Foreclosed assets	46	42
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired collateral-dependent loans	0	0
MSRs	168	178
Foreclosed assets	$ 0	$ 0

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FAIR VALUE MEASUREMENTS - Schedule of Financial Instruments not Recorded at Fair Value (Details) - USD ($) $ in Millions		Mar. 31, 2016	Dec. 31, 2015
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities held to maturity, carrying value	[1]	$ 5,129	$ 5,258
Securities held-to-maturity, fair value		5,261	5,297
Other investment securities, at cost, carrying value		896	863
Other investment securities, at cost, fair value		896	863
Other loans held for sale, carrying value		386	40
Other loans held for sale, fair value		386	40
Loans and leases, carrying value		100,991	99,042
Loans and leases, fair value		101,475	99,026
Deposits, carrying value		102,606	102,539
Deposits, fair value		102,606	102,528
Federal funds purchased and securities sold under agreements to repurchase, carrying value		714	802
Federal funds purchased and securities sold under agreements to repurchase, fair value		714	802
Other short-term borrowed funds, carrying value		3,300	2,630
Other short-term borrowed funds, fair value		3,300	2,630
Long-term borrowed funds, carrying value		10,035	9,886
Long-term borrowed funds, fair value		10,142	9,837
Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities held to maturity, carrying value		0	0
Securities held-to-maturity, fair value		0	0
Other investment securities, at cost, carrying value		0	0
Other investment securities, at cost, fair value		0	0
Other loans held for sale, carrying value		0	0
Other loans held for sale, fair value		0	0
Loans and leases, carrying value		0	0
Loans and leases, fair value		0	0
Deposits, carrying value		0	0
Deposits, fair value		0	0
Federal funds purchased and securities sold under agreements to repurchase, carrying value		0	0
Federal funds purchased and securities sold under agreements to repurchase, fair value		0	0
Other short-term borrowed funds, carrying value		0	0
Other short-term borrowed funds, fair value		0	0
Long-term borrowed funds, carrying value		0	0
Long-term borrowed funds, fair value		0	0
Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities held to maturity, carrying value		5,129	5,258
Securities held-to-maturity, fair value		5,261	5,297
Other investment securities, at cost, carrying value		896	863
Other investment securities, at cost, fair value		896	863
Other loans held for sale, carrying value		0	0
Other loans held for sale, fair value		0	0
Loans and leases, carrying value		39	60
Loans and leases, fair value		39	60
Deposits, carrying value		102,606	102,539
Deposits, fair value		102,606	102,528
Federal funds purchased and securities sold under agreements to repurchase, carrying value		714	802
Federal funds purchased and securities sold under agreements to repurchase, fair value		714	802
Other short-term borrowed funds, carrying value		3,300	2,630
Other short-term borrowed funds, fair value		3,300	2,630
Long-term borrowed funds, carrying value		10,035	9,886
Long-term borrowed funds, fair value		10,142	9,837
Level 3
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities held to maturity, carrying value		0	0
Securities held-to-maturity, fair value		0	0
Other investment securities, at cost, carrying value		0	0
Other investment securities, at cost, fair value		0	0
Other loans held for sale, carrying value		386	40
Other loans held for sale, fair value		386	40
Loans and leases, carrying value		100,952	98,982
Loans and leases, fair value		101,436	98,966
Deposits, carrying value		0	0
Deposits, fair value		0	0
Federal funds purchased and securities sold under agreements to repurchase, carrying value		0	0
Federal funds purchased and securities sold under agreements to repurchase, fair value		0	0
Other short-term borrowed funds, carrying value		0	0
Other short-term borrowed funds, fair value		0	0
Long-term borrowed funds, carrying value		0	0
Long-term borrowed funds, fair value		$ 0	$ 0

[1] Includes only collateral pledged by the Company where counterparties have the right to sell or pledge the collateral.

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REGULATORY MATTERS - Narrative (Details) $ in Millions	3 Months Ended
	Mar. 31, 2016 USD ($) subsidiary
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Dividends | $	$ 53
Banking Subsidiaries
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Number of financial subsidiaries | subsidiary	2
CBNA subsidiaries
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Number of financial subsidiaries | subsidiary	2
Series A Preferred Stock
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Dividends | $	$ 7

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REGULATORY MATTERS - Capital and Capital Ratio Information (Details) - USD ($) $ in Millions		Mar. 31, 2016		Dec. 31, 2015
Common Equity Tier 1 to Risk-Weighted Assets (Amount)
Actual	[1]	$ 13,570	[2]	$ 13,389
Minimum Capital Adequacy	[1]	5,975	[2]	5,134
Classification as Well-capitalized	[1]	$ 7,578	[2]	$ 7,415
Common Equity Tier 1 to Risk-Weighted Assets (Ratio)
Actual	[1]	11.60%	[2]	11.70%
Minimum Capital Adequacy	[1]	5.125%	[2]	4.50%
Classification as Well-capitalized	[1]	6.50%	[2]	6.50%
Tier 1 Capital to Risk-Weighted Assets (Amount)
Actual	[3]	$ 13,817	[2]	$ 13,636
Minimum Capital Adequacy	[3]	7,724	[2]	6,845
Classification as Well-capitalized	[3]	$ 9,327	[2]	$ 9,127
Tier 1 Capital to Risk-Weighted Assets (Ratio)
Actual	[3]	11.90%	[2]	12.00%
Minimum Capital Adequacy	[3]	6.625%	[2]	6.00%
Classification as Well-capitalized	[3]	8.00%	[2]	8.00%
Total Capital to Risk-Weighted Assets (Amount)
Actual	[4]	$ 17,587	[2]	$ 17,505
Minimum Capital Adequacy	[4]	10,056	[2]	9,127
Classification as Well-capitalized	[4]	$ 11,659	[2]	$ 11,408
Total Capital to Risk-Weighted Assets (Ratio)
Actual	[4]	15.10%	[2]	15.30%
Minimum Capital Adequacy	[4]	8.625%	[2]	8.00%
Classification as Well-capitalized	[4]	10.00%	[2]	10.00%
Tier 1 Capital to Average Assets (Leverage) (Amount)
Actual	[5]	$ 13,817		$ 13,636
Minimum Capital Adequacy	[5]	5,318		5,218
Classification as Well-capitalized	[5]	$ 6,648		$ 6,523
Tier 1 Capital to Average Assets (Leverage) (Ratio)
Actual	[5]	10.40%		10.50%
Minimum Capital Adequacy	[5]	4.00%		4.00%
Classification as Well-capitalized	[5]	5.00%		5.00%
Capital Conservation Buffer		0.625%

[1] “Common equity tier 1 capital ratio” represents CET1 divided by total risk-weighted assets as defined under Basel III Standardized approach.

[2] “Minimum Capital ratio” for 2016 includes capital conservation buffer of .625%.

[3] “Tier 1 capital ratio” is tier 1 capital, which includes CET1 capital plus non-cumulative perpetual preferred equity that qualifies as additional tier 1 capital, divided by total risk-weighted assets as defined under Basel III Standardized approach.

[4] “Total capital ratio” is total capital divided by total risk-weighted assets as defined under Basel III Standardized approach.

[5] “Tier 1 leverage ratio” is tier 1 capital divided by quarterly average total assets as defined under Basel III Standardized approach.

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EXIT COSTS AND RESTRUCTURING RESERVES - Narrative (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Restructuring Cost and Reserve [Line Items]
Restructuring charges incurred	$ 0	$ 26,000,000
Outside Services
Restructuring Cost and Reserve [Line Items]
Restructuring charges incurred		8,000,000
Salaries & Employee Benefits | Salaries & Employee Benefits
Restructuring Cost and Reserve [Line Items]
Restructuring charges incurred		1,000,000
Occupancy & Equipment | Occupancy & Equipment
Restructuring Cost and Reserve [Line Items]
Restructuring charges incurred		$ 17,000,000

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EXIT COSTS AND RESTRUCTURING RESERVES - Reserve Rollforward (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Restructuring Reserve [Roll Forward]
Beginning balance	$ 33	$ 44
Additions		31
Reversals		(5)
Utilization	(9)	(37)
Ending balance	24	33
Salaries & Employee Benefits | Salaries & Employee Benefits
Restructuring Reserve [Roll Forward]
Beginning balance	12	23
Additions		5
Reversals		(4)
Utilization	(2)	(12)
Ending balance	10	12
Occupancy & Equipment | Occupancy & Equipment
Restructuring Reserve [Roll Forward]
Beginning balance	16	18
Additions		18
Reversals		(1)
Utilization	(2)	(19)
Ending balance	14	16
Other | Other
Restructuring Reserve [Roll Forward]
Beginning balance	5	3
Additions		8
Reversals		0
Utilization	(5)	(6)
Ending balance	$ 0	$ 5

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RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Schedule of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance	$ (387)	$ (372)
Other comprehensive income before reclassifications	187	155
Other-than-temporary impairment not recognized in earnings on securities	(25)	(19)
Amounts reclassified from other comprehensive (loss) income	(11)	(4)
Net other comprehensive income	151	132
Ending balance	(236)	(240)
Net Unrealized Gains (Losses) on Derivatives
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance	10	(69)
Other comprehensive income before reclassifications	33	65
Other-than-temporary impairment not recognized in earnings on securities	0	0
Amounts reclassified from other comprehensive (loss) income	(8)	(2)
Net other comprehensive income	25	63
Ending balance	35	(6)
Net Unrealized Gains (Losses) on Securities
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance	(28)	74
Other comprehensive income before reclassifications	154	90
Other-than-temporary impairment not recognized in earnings on securities	(25)	(19)
Amounts reclassified from other comprehensive (loss) income	(5)	(4)
Net other comprehensive income	124	67
Ending balance	96	141
Defined Benefit Pension Plans
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance	(369)	(377)
Other comprehensive income before reclassifications	0	0
Other-than-temporary impairment not recognized in earnings on securities	0	0
Amounts reclassified from other comprehensive (loss) income	2	2
Net other comprehensive income	2	2
Ending balance	$ (367)	$ (375)

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RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Reclassifications out of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions		3 Months Ended
		Mar. 31, 2016	Mar. 31, 2015
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Interest income		$ 145	$ 159
Interest expense		(115)	(106)
Net securities impairment losses recognized in earnings		(1)	(1)
Salaries and employee benefits		(425)	(419)
Income before income tax expense		332	315
Income tax expense		109	106
Net income		223	209
Amount Reclassified from AOCI
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Income tax expense		7	3
Net income		11	4
Reclassification adjustment for net derivative gains (losses) included in net income: | Amount Reclassified from AOCI
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Interest income	[1]	22	18
Interest expense	[1]	(8)	(15)
Income before income tax expense		14	3
Income tax expense		6	1
Net income		8	2
Reclassification of net securities gains (losses) to net income: | Amount Reclassified from AOCI
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Securities gains, net		9	8
Net securities impairment losses recognized in earnings		(1)	(1)
Income before income tax expense		8	7
Income tax expense		3	3
Net income		5	4
Reclassification of changes related to defined benefit pension plans: | Amount Reclassified from AOCI
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Salaries and employee benefits		(4)	(3)
Income before income tax expense		(4)	(3)
Income tax expense		(2)	(1)
Net income		$ (2)	$ (2)

[1] This amount includes both (a) the amortization of effective gains and losses associated with the Company’s terminated cash flow hedges and (b) the current reporting period’s interest settlements realized on the Company’s active cash flow hedges. Both (a) and (b) were previously included on the accumulated other comprehensive loss line item on the Consolidated Balance Sheets and were subsequently recorded as adjustments to the interest expense of the underlying hedged item.

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RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Effects to Net Income of Amounts Reclassified Out of OCI (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net interest income	$ 904	$ 836
Provision for credit losses	91	58
Noninterest income	330	347
Noninterest expense	811	810
Income before income tax expense	332	315
Income tax expense	109	106
Net income	223	209
Amount Reclassified from OCI
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net interest income	904	836
Provision for credit losses	91	58
Noninterest income	330	347
Noninterest expense	811	810
Income before income tax expense	332	315
Income tax expense	109	106
Net income	223	209
Amount Reclassified from AOCI
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net interest income	14	3
Noninterest income	8	7
Noninterest expense	4	3
Income tax expense	7	3
Net income	$ 11	$ 4

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BUSINESS SEGMENTS - Narrative (Details) $ in Millions	3 Months Ended
	Mar. 31, 2016 USD ($) segment	Mar. 31, 2015 USD ($)
Segment Reporting Information [Line Items]
Number of segments | segment	2
Revenues	$ 1,234	$ 1,183
Consumer Banking
Segment Reporting Information [Line Items]
Revenues	789	752
Consumer Banking | Maximum
Segment Reporting Information [Line Items]
Revenues	25
Commercial Banking
Segment Reporting Information [Line Items]
Revenues	399	$ 376
Commercial Banking | Minimum
Segment Reporting Information [Line Items]
Revenues	25
Commercial Banking | Maximum
Segment Reporting Information [Line Items]
Revenues	$ 2,500

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BUSINESS SEGMENTS (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Segment Reporting Information [Line Items]
Net interest income	$ 904	$ 836
Noninterest income	330	347
Total revenue	1,234	1,183
Noninterest expense	811	810
Profit before provision for credit losses	423	373
Provision for credit losses	91	58
Income before income tax expense	332	315
Income tax expense	109	106
Net income	223	209
Total average assets	138,780	133,325
Consumer Banking
Segment Reporting Information [Line Items]
Net interest income	581	533
Noninterest income	208	219
Total revenue	789	752
Noninterest expense	616	596
Profit before provision for credit losses	173	156
Provision for credit losses	63	63
Income before income tax expense	110	93
Income tax expense	39	32
Net income	71	61
Total average assets	55,116	51,602
Commercial Banking
Segment Reporting Information [Line Items]
Net interest income	300	276
Noninterest income	99	100
Total revenue	399	376
Noninterest expense	187	173
Profit before provision for credit losses	212	203
Provision for credit losses	9	(21)
Income before income tax expense	203	224
Income tax expense	70	77
Net income	133	147
Total average assets	45,304	41,606
Other
Segment Reporting Information [Line Items]
Net interest income	23	27
Noninterest income	23	28
Total revenue	46	55
Noninterest expense	8	41
Profit before provision for credit losses	38	14
Provision for credit losses	19	16
Income before income tax expense	19	(2)
Income tax expense	0	(3)
Net income	19	1
Total average assets	$ 38,360	$ 40,117

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EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Numerator (basic and diluted):
Net income	$ 223	$ 209
Less: Preferred stock dividends	7	0
Net income available to common stockholders	$ 216	$ 209
Denominator:
Weighted-average common shares outstanding - basic (in Shares)	528,070,648	546,291,363
Dilutive common shares: share-based awards (in Shares)	2,375,540	3,507,354
Weighted-average common shares outstanding - diluted (in Shares)	530,446,188	549,798,717
Earnings per common share:
Basic (in Dollars per Share)	$ 0.41	$ 0.38
Diluted (in Dollars per Share)	$ 0.41	$ 0.38

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OTHER OPERATING EXPENSE (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Other Income and Expenses [Abstract]
Deposit insurance	$ 26	$ 34
Promotional expense	24	22
Postage and delivery	12	12
Other	53	65
Other operating expense	$ 115	$ 133

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SUBSEQUENT EVENTS (Details) - USD ($) $ / shares in Units, $ in Millions			3 Months Ended
	Apr. 21, 2016	Apr. 07, 2016	Mar. 31, 2016	Mar. 31, 2015
Subsequent Event
Subsequent Event [Line Items]
Dividends declared and paid (in Dollars per Share)	$ 0.12
Dividends to common stockholders	$ 64
Student loan
Subsequent Event [Line Items]
Loans purchased during period			$ 369	$ 261
Student loan | Subsequent Event
Subsequent Event [Line Items]
Loans purchased during period		$ 348