Van Saun: Citizens ‘growing into being a public company’

CITIZENS FINANCIAL GROUP CHAIRMAN AND CEO Bruce Van Saun looks forward to 2016 as the bank continues to distance itself from its time as a subsidiary of Royal Bank of Scotland. / PBN FILE PHOTO/TRACY JENKINS
CITIZENS FINANCIAL GROUP CHAIRMAN AND CEO Bruce Van Saun looks forward to 2016 as the bank continues to distance itself from its time as a subsidiary of Royal Bank of Scotland. / PBN FILE PHOTO/TRACY JENKINS

(Updated, 6:25 p.m.)
PROVIDENCE – Citizens Financial Group Inc. is a “work in progress,” says its CEO, as Rhode Island’s largest bank continues to acclimate to life in the public eye, free from a far-away parent.

The Providence-based company on Friday released its year-end earnings. Results showed a strong fourth quarter and full-year results that were not obvious at first blush. Net income calculated using generally accepted accounting principles showed a 2.9 percent drop to $840 million, or $1.55 per diluted share, compared with 2014. However, after removing the effects of the 2014 divestiture of some of its Chicago-area operations and restructuring charges for both 2014 and 2015, the bank showed a 10.3 percent increase in net income to $871 million.

Fourth-quarter momentum supported year-over-year profit growth of $221 million, or 12.2 percent, giving Chairman and CEO Bruce Van Saun optimism for the new year. (More on the bank’s fourth-quarter and year-end earnings can be found HERE.)

“We’ve found pockets where we’ve been able to get reasonable levels of loan growth, and I feel quite confident that if the economy doesn’t fall, that’s really the engine to improving our financial performance,” Van Saun told Providence Business News.

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Van Saun, who took over the bank’s top position in 2013, has steered the company through an initial public offering and a complete spinoff from The Royal Bank of Scotland PLC. The London-based bank became fully divested in October, more than a year ahead of schedule. The chief executive says the spinoff didn’t have any major effects on the bank’s overall financial performance last year, but obtaining full independence was a “big psychological victory.”

“As a far-flung subsidiary, we weren’t necessarily optimizing how the bank was running. We were marching a bit to the beat of their drummer,” Van Saun said,

Now, he added, Citizens has the ability to follow its own growth strategies and work toward coming in-step with local competition.

Rhode Island continues to play a key role in the eyes of the company’s CEO, who reaffirmed the bank is considering the possibility of moving or building new facilities after its lease agreement expires in 2018 at current facilities in Cranston.

Van Saun wouldn’t divulge specifics, but said the bank is progressing toward making a decision and is committed to “keeping those positions in Rhode Island.”

When asked if there was any appetite to fill the so-called “Superman Building,” which sits prominently empty on Westminster Street in downtown Providence, Van Saun opted not to comment. The bank has repeatedly been rumored to be considering the space.

In 2016, the bank will likely continue to outsource some of its technology work, contracting specifically with IBM. The move to outsource technology operations began in 2014-15, when the bank contracted with Infosys.

The strategy to become more efficient could result in an overall reduction of departmental staff, effectively reducing salary and benefit expenses for the company’s IT budget. But Van Saun is confident a large portion of affected employees will shift over to IBM, and expects some modest level of staff growth overall in 2016, as Citizens eyes new hires in wealth management, corporate banking and business banking.

“The net-net will result in a rise of employment over the course of this year,” he said.

Van Saun says he’s confident the company’s overall strategy, aided by its still-newfound independence, will help Citizens become a stronger, more competitive, public financial institution in 2016.

“Part of the challenges of taking a company public is that you’re living in much more of a fishbowl, so you have to face the music more often and be crisp about talking about your strategy and your ability to execute, while having a sense of urgency to deliver what’s expected,” Van Saun said. “I think we’ve made some cultural shifts and brought in some great people … I think we’re growing into being a public company.”

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