Citizens Financial Group CEO Touts Private Bank Growth, $450M AI Efficiency Push

Key Points

• Citizens Financial CEO Bruce Van Saun said the bank’s private bank is scaling quickly, now with more than $16 billion in deposits and contributing about 10% of pretax income in Q1. He said the unit could grow to the mid-teens as a share of pretax income over time.
• The bank is pushing a major AI and automation initiative called “Reimagine the Bank,” targeting a $450 million pretax benefit by 2028. Citizens expects about $100 million in run-rate benefits by year-end from faster-payback efforts such as vendor consolidation, office consolidation, and AI-driven call center tools.
• Van Saun said Citizens is seeing stable credit trends and healthy loan and deposit growth, while keeping M&A a lower priority. He said the bank is focused on organic growth in consumer, commercial and private banking, and is aiming for a 16% to 18% return on tangible common equity by next year.

Citizens Financial Group NYSE: CFG Chairman and CEO Bruce Van Saun said the bank is benefiting from a decade-long transformation since its 2014 public listing, highlighting growth opportunities across consumer banking, commercial banking and private banking during a Barclays financial services event moderated by analyst Jason Goldberg.

Van Saun described Citizens’ strategy as a “triangle of businesses,” with the consumer bank providing stable, low-cost deposits; the commercial bank offering expanded capital markets and advisory capabilities; and the private bank adding a faster-growing, higher-return platform.

Private Bank Becomes a Larger Contributor

Van Saun said Citizens’ private bank has scaled quickly after the bank hired about 150 former First Republic employees in June following First Republic’s failure. He said the business now has more than $16 billion in deposits, about $7.5 billion in loans and more than $10 billion in wealth client assets.

According to Van Saun, the private bank is producing more than a 25% return on equity and accounted for about 10% of pretax income in the first quarter. He said Citizens expects the business to reach the “mid-teens” as a share of pretax income over the medium term.

Citizens began with private banking teams in Boston, New York, Florida and Northern California and has since expanded in Southern California, including Los Angeles, San Diego and Orange County. Van Saun said the bank is also looking to build further in Florida, including Palm Beach and West Palm Beach, and is evaluating opportunities in Greenwich, Boston suburbs and eventually Philadelphia.

Commercial Banking and Private Credit Outlook

On the commercial side, Van Saun said Citizens has expanded from a regional bank focused on traditional treasury products into a broader platform with mergers and acquisitions, equities, debt capital markets and securitization capabilities. He said the bank has also emphasized middle-market and mid-corporate clients, industry verticals and private equity sponsors.

Discussing private credit, Van Saun said Citizens is focused on clients it knows well and is not pursuing “marginal opportunities.” He said most of the bank’s private credit exposure is investment-grade lending and “very well structured,” adding that he does not see credit issues in Citizens’ portfolio. Still, he said the broader private credit market may go through a period of consolidation after rapid growth.

Consumer Bank Focuses on New York and Deposit Growth

Van Saun said the consumer bank remains central to Citizens’ funding strategy. He pointed to the bank’s acquisitions of HSBC’s East Coast branches and Investors Bank, which created a roughly 200-branch network across New York and New Jersey. He said that region has been Citizens’ fastest-growing area for households and deposits.

Citizens is reviewing its branch network to determine where it can optimize existing markets, including New York City, outer boroughs, Long Island and New Jersey. Van Saun said the bank has been reducing its reliance on supermarket branches and considering more de novo branches and staffing changes where it sees potential for small-business banking or wealth cross-selling.

AI Program Targets $450 Million Benefit

Van Saun also discussed Citizens’ “Reimagine the Bank” initiative, which he said is designed to use technology, process redesign and artificial intelligence to improve customer experience and efficiency. He said the effort targets a $450 million pretax pre-provision net revenue benefit by 2028.

The program includes 11 major building blocks and about 50 initiatives, Van Saun said. Some efforts involve vendor consolidation, office consolidation and call center investments using AI and bots. He said Citizens expects to reach about a $100 million run-rate benefit by the end of the year from faster-payback initiatives while continuing work on longer-term technology changes.

Financial Outlook, Capital and M&A

Van Saun said the economy has not weakened materially despite geopolitical tensions, tariff concerns and higher energy prices. He said Citizens had expected U.S. GDP growth of 2% to 2.5% entering the year and may now be toward the lower end of that range. He described consumer credit trends as stable, corporate credit performance as clean and commercial real estate as an area where the bank remains cautious, particularly in office.

On loan growth, Van Saun said the private bank could contribute about $1 billion per quarter, while commercial banking demand remains healthy and mortgage and home equity lending continue to support consumer growth. He said Citizens has improved the customer experience for home equity lines of credit, reducing a process that typically takes about 45 days to roughly 14 to 20 days.

Van Saun said deposit growth is being helped by the private bank, where about one-third of deposits are non-interest-bearing, as well as by consumer growth in New York and commercial initiatives in California and Florida. He said Citizens remains confident in its net interest margin trajectory, citing time-based benefits from swap-related accounting amortization and non-core asset actions.

On expenses, Van Saun said Citizens is targeting 4.5% expense growth, with the core bank running closer to 3% and private bank investment adding to that total. He said the bank is balancing spending on growth areas, capital markets, technology, cloud infrastructure and AI while maintaining discipline.

Van Saun said bank mergers and acquisitions are a lower priority because Citizens has significant organic growth initiatives underway, including the private bank and Reimagine the Bank. He said the private bank has provided a “capital light” way to add earnings, while the technology initiative offers another capital-light opportunity to improve profitability.

Citizens has discussed a 16% to 18% return on tangible common equity target by the end of next year. Van Saun said the bank should first achieve that range before considering whether to raise its targets, but added that continued private bank growth and execution of the broader strategy could create upside over time.

About Citizens Financial Group NYSE: CFG

Citizens Financial Group, Inc NYSE: CFG is a bank holding company that provides a broad range of banking and financial services to individuals, small and middle-market businesses, corporations and institutional clients. Headquartered in Providence, Rhode Island, Citizens conducts its banking operations principally through its primary banking subsidiary, Citizens Bank, and serves customers through a combination of branch locations, ATMs and digital channels. The company is publicly traded and operates under the regulatory framework applicable to U.S.

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