Citizens Financial Group Planning a Branch Network Revamp
Citizens Financial Group is set to revamp its branch network. The goal is to attract more customers and increase deposits. The move sees Citizens joining a growing list of large and regional banks that are reassessing their branch networks with similar objectives.
The $227.9 billion-asset regional bank is currently analyzing its retail branch network and expects to disclose details of its optimization strategy by mid-year, according to CEO Bruce Van Saun. The plan involves opening new branches in key markets like New York City while closing or relocating others.
Strategic Realignment, Not Cost-Cutting
The goal of the review is not to cut costs but to capture more customers, households, and deposits. This strategy is in line with other large and regional banks that are reassessing their footprints to attract more retail and wealth management customers. Notably, JPMorganChase, Bank of America, and PNC Financial Services Group have also been investing in their branch networks, despite a decline in their net branch count.
Targeting Existing Markets, Avoiding New Ones
Citizens, which operates approximately 1,000 branches predominantly in the Northeast, plans to increase its presence in the New York metro area. The bank has been investing in this market since completing back-to-back acquisitions in 2022. The strategy is to connect better with the local population to grow households and deposits, according to Van Saun.
By focusing on existing markets, Citizens can avoid the costs and challenges of introducing the bank to new markets, including “top of funnel” advertising expenses. This approach could yield $20 billion to $30 billion of new deposits, Van Saun predicts.
First-Quarter Earnings Beat
Citizens reported a strong first-quarter performance, with net income climbing 39%. The bank benefited from increases in both net interest income and fee income. Earnings per share totaled $1.13 for the period ending March 31, up 47% from a year earlier and surpassing analysts’ estimate by four cents, according to S&P Capital IQ.
The bank’s recently launched private bank contributed significantly to its overall earnings-per-share total. Revenue reached approximately $2.2 billion for the quarter, a 12% year-over-year increase. Expenses totaled $1.4 billion, up 5% year over year, partly due to costs related to a three-year technology-overhaul project titled “Reimagine the Bank”. The project aims to incorporate artificial intelligence to revamp the call center, optimize vendors and provide digital advisory services.
Strong Performance and Future Prospects
The bank’s return on tangible common equity was 12.2%, the same as during the prior quarter and an improvement from the first quarter of 2025, when it came in at 9.6%. Citizens’ efficiency ratio was 63.6% at the end of March, slightly higher than December but down from the year-ago period.
Citizens also repurchased $300 million of shares between January and March, and executives expect to buy back $225 million during the second quarter. The private bank, which launched in 2023, accounted for about 10% of Citizens’ pretax income and achieved a return on equity beyond 25%, according to Van Saun.
The bank remains focused on its longer-term financial targets and continues to expect to achieve a return on tangible common equity of 16% to 18% by the end of 2027.
In terms of mergers and acquisitions, Citizens prefers to stay on the sidelines for whole-bank deals. However, it is open to considering smaller, tuck-in deals like its recent acquisition of M&A boutique firm Matrix Capital Markets Group. The payments space could be an area to bulk up, according to Van Saun.
Overall, Citizens’ strategic branch network revamp and solid first-quarter performance highlight its commitment to growth and customer-centric services. The bank’s forward-looking approach is a testament to its ability to adapt to changing market dynamics while maintaining its financial objectives.
Source: Here
