Fourteen months earlier than anticipated, Citizens Financial Group Inc. last week gained its independence from former parent Royal Bank of Scotland Group PLC.
The news that RBS had sold the last of its Citizens shares, for $2.6 billion, was interpreted by analysts as an indication that the regional bank, based in Providence, is positioned for growth.
The bank has a large presence in the Ocean State, where it is the largest regional bank by deposit market share and is the state’s fourth-largest private employer. Citizens employed 5,250 in 2014, according to the Providence Business News 2015 Book of Lists.
It had $135.4 billion in assets as of Sept. 30, including $101.9 billion in deposits.
Its independence from the Scottish-based RBS after almost 30 years provides a psychological boost for the bank’s leadership, according to the chief executive.
“We have met or exceeded financial expectations every quarter since our IPO last year,” said the bank’s chairman and CEO, Bruce Van Saun. “This is now another milestone confirming the progress we’re making toward our goal of becoming a top-performing, regional bank.
“We are now attracting top-flight executives who are helping us drive our strategies going forward. We … don’t believe talent of this caliber would have been as likely to come to Citizens if we hadn’t been on the path to independence,” he said.
As for immediate changes, Van Saun told Bloomberg News on Nov. 2 the company is continuing to focus on increasing assets and market share through organic growth, rather than acquisitions.
But growth is the idea. “We’ve been investing in our commercial business, both on the coverage side and in our product capabilities, as well as cash management,” Van Saun told Bloomberg in a broadcast interview. “We see continued opportunity to take share and grow that business.”
On the consumer side, he said, “We’re acquiring households. So we’re growing again with a very robust product offering. And we’re investing heavily in wealth and mortgage business, where we’ve been subscale.”
Acquisition of smaller lenders, Van Saun said, could be in the future but would be at least a year away. “Right now, I think we’re good where we are,” he told Bloomberg.
Analyst Scott Siefers, of Sandler, O’Neill + Partners LP, said the status of the bank as an independent entity, rather than a subsidiary of a British company, should lead to more confidence among the bank’s current and potential customers.
Sandler O’Neill, which has managed offerings from Citizens, in September upgraded its opinion to a “buy” position, reflecting analysts’ opinion that the stock will gain value.
Although cost containment is always an issue, contraction is not a real concern for those watching the bank, he said. “I think things will go the other way. I don’t think downsizing is on their radar screen.” •
