Citizens CEO excited about bank’s future with Republicans in charge of government

BRUCE VAN Saun, chairman and CEO of Citizens Financial Group Inc., is shown in his office at 1 Citizens Plaza in Providence.
 / PBNFILE PHOTO/ MICHAEL SALERNO
BRUCE VAN Saun, chairman and CEO of Citizens Financial Group Inc., is shown in his office at 1 Citizens Plaza in Providence. / PBNFILE PHOTO/ MICHAEL SALERNO

PROVIDENCE – Bruce Van Saun, chairman and CEO of Citizens Financial Group Inc., is bullish about what impact a pro-growth, Republican-run U.S. government could have on the financial health of his bank in 2017.
Van Saun on Wednesday presented at the Goldman Sachs U.S. Financial Services Conference, noting the strong performance financial institutions have had in the market since Republican Donald J. Trump won last month’s presidential election. The stock price for Citizens since then has increased 27.1 percent, opening Wednesday trading at $34.9 per share.
“Regional banks have had a nice run here since the election,” he told investors. “I think it’s a sanguine view of what a Republican government could do in a pro-growth economy.”
A pro-growth agenda, Van Saun added, could translate into greater growth, higher rates and fewer regulation, which together could give banks a boost. The top executive is also paying close attention to what might happen with corporate tax reform, as a lower rate – proposed as part of Trump’s tax plan – could translate into big-time savings for the bank.
“If you look at the domestic players, we pay a relatively high tax rate,” he told investors.
When asked about other regulatory reforms, Van Saun said improving economic conditions – specifically maintaining 3 percent gross domestic product growth – would likely have a greater impact on the financial health of banks. But he does hope there’s some type of reform to the Dodd-Frank Act – implemented following the financial crisis of 2008 – that acknowledges the differences between regional players and national and global banks. Doing so, he said, could bring some respite to compliance-related expenses for regional banks.
“[We] should be differentiated from the big banks,” he said.
Citizens, with $147 billion in assets, bills itself as the 12th largest U.S.-based retail bank. Van Saun, who took over at the bank in 2013, touched on a number of other topics during the presentation, including the fact that the asset-sensitive bank has successfully spun off from its former parent The Royal Bank of Scotland PLC while maintaining positive operating leverage in a low-rate environment. And while Citizens under his tenure has outperformed peers in several areas, the CEO would like to see the company boost its fee-based income, where it ranks the lowest among peers.
Van Saun, along with the entire financial services industry, is also closely watching the Federal Reserve’s policy meeting this month, as there’s an industry expectation that interest rates could increase, which would likely further boost bank performance.
Despite all the positive signs, however, Van Saun cautions against getting too bullish, saying it’s important the bank continues with its current approach of growing independently of external forces.
“It’s still early days and we have to see how things play out,” he added.

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