: Citizens is shedding ‘Bank’ from its name as it stretches beyond its regional roots for a national presence


Citizens Financial Group Inc. plans to be known simply as Citizens at its new bank branches as the former regional bank grows as a national brand with more acquisitions likely, according to CEO Bruce Van Saun. 

The Rhode Island-based company has just marked seven years since its 2014 initial public offering as a former unit of Royal Bank of Scotland and has been making moves to build up its consumer and commercial banking pillars in four deals since May.

Citizens CFG plans to roll out its stripped down brand Citizens, not Citizens Financial, or Citizens Bank. It’s similar to Dunkin’ dropping “Donuts” from its name and rebranding the company as Dunkin’ or DD, Van Saun said. In financial services, Truist 

has dropped the word “Financial” as well.

“We like the brand as Citizens—it isn’t just a bank name,” Van Saun said in an interview with MarketWatch. 

The company plans to rebrand banks it’s acquiring in the New York City area and elsewhere as it grows its bricks-and-mortar presence to 12 states. Along with the Big Apple, it’s also expanding in California, the Southeastern U.S. and Texas.

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As a regional bank that embraced electronic payments early on, Citizens has been present in all 50 states virtually with its all-digital direct bank. At last check, it counted 1.7 million mobile banking users, and 7.7 million customers nationwide.

It’s also gotten its name out beyond its retail banking footprint as the lender for Apple Inc.’s AAPL iPhone loan program. Other major business lines include student loan refinancing and mortgage lending.

The company is overhauling its bank branches to reflect the reality that customers do most of their transactions remotely from their mobile devices.

“The world is moving toward digital transactions so we’ve changed our branches into advice centers, where you get to meet people,” Van Saun said.

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Like other regional banks forced to scale up to compete with megabanks as well as fintech challengers, Citizens has been particularly active on the acquisition front.

After shoring up its reserves and laying low during the coronavirus pandemic, Citizens hit the accelerator on acquisitions by adding on more businesses this year.

It announced plans to buy JMP Group LLC

for $149 million on Sept. 8, after the larger purchase of Investors Bancorp

for $3.5 billion in stock in July. In May, it acquired 80 branches of HSBC

in New York, the mid-Atlantic region and Florida, for an undisclosed sum. And in August, it purchased valuation consulting firm Willamette Management Associates, also without disclosing financial details. 

The JMP deal gives Citizens a greater presence in investment banking and capital markets, particularly in healthcare and technology, while Investors Bancorp significantly adds to its retail banking footprint.

Looking ahead, Van Saun said he has been focusing on increasing the bank’s ROTCE— return on tangible common equity — a key indicator of a bank’s ability to boost profits. The four acquisitions announced this year will help the bank on this front, he said.

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Citizens has been gradually increasing that figure to about 12.5 % ROTCE, but it still trails some of its peers with 14% to 16% ROTCE.

The stock’s target price by analysts is averaging $53 a share, including a tangible book value of $35 a share. When it achieves the 14% to 16% ROTCE, the company’s valuation would jump up to about $70 a share, he said.

Citizens shares are often seen as a cyclical play on e-commerce and loan demand because it’s had a large exposure to retail banking in its core business. The stock often gets a more rapid bounce back in recoveries, but is also hit harder on the downside, he said.

Citizens stock has risen 25% so far this year as of midday trading Thursday, compared with a rise of 25.9% by the Financial Select SPDR Fund

and a gain of 21% by the SPDR S&P Regional Banking ETF

Another item on Van Saun’s bucket list is using potential acquisitions to grow the company’s presence in New York. He’d like it to be comparable to its roughly 34% market share of retail branches in Boston and 26% in Philadelphia. The deal with Investors Bancorp will give it a roughly 3% to 4% bank branch market share in New York City.

In terms of M&A, Citizens may announce smaller tuck-in deals this year, but no major transactions are in the works until after the HSBC deal closes in the first quarter and the Investors Bancorp transaction wraps up early in the second quarter of 2022.

“We’re kicking the tires on a couple of smaller deals and maybe we’ll get something done by the end of the year,” Van Saun said. “We’re playing offense and spending money to grow.”

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