Citizens Financial Group

Citizens Financial Group, Inc.
	File:Citizens Financial Group logo.svg Logo used since 2005, retaining the "daisy wheel" from RBS affiliation
Company type	Public company
Industry	Banking, financial services
Founded	1828
Headquarters	Providence, United States
Area served	Connecticut, Delaware, Florida, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Vermont, Virginia, Washington, DC
Products	Banking services (retail and commercial), wealth management
Website	www.citizensbank.com

Citizens Financial Group, Inc. is a U.S.-based bank holding company with its headquarters located in Providence, Rhode Island. It owns and operates Citizens Bank, N.A., which serves customers across Connecticut, Delaware, Florida, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Vermont, Virginia, and Washington, DC.

Between 1988 and its 2014 initial public offering, Citizens functioned as a wholly owned subsidiary of the Royal Bank of Scotland (RBS). RBS completed the sale of its remaining 20.9% equity interest in October 2015.

As of August 31, 2023, the bank operates 1,078 branches and four wealth centers, along with more than 3,200 ATMs spread across 14 states under the Citizens Bank brand.

By the third quarter of 2024, Citizens was ranked as the 18th largest banking institution in the United States.

Early history

Established in 1828 as the High Street Bank in Providence, Rhode Island, Citizens traces its origins to this early financial institution. In 1871, the Rhode Island legislature granted a charter to the Citizens Savings Bank, which eventually acquired its parent company to create Citizens Trust Company. The bank expanded its footprint throughout Rhode Island by opening a total of 29 branches. Following the acquisition of The Greenville Trust Company in 1954, Citizens Financial Group was formed as a holding company.

In 1985, Citizens transitioned from a mutual savings bank to a federal stock savings bank and initiated expansion into Massachusetts starting in 1986.

RBS ownership

The Royal Bank of Scotland Group acquired Citizens in 1988. During RBS’s ownership, Citizens grew by acquiring several smaller banks throughout New England, ultimately becoming the second-largest bank in that region. In 1996, through the acquisition of First NH Bank, the Bank of Ireland obtained a 23.5% interest, which RBS fully reacquired by 1998.

In 1999, Citizens broadened its presence in Massachusetts by purchasing United States Trust Company of Boston along with State Street Corporation’s retail banking operations.

RBS extended Citizens’ operations beyond New England in 2001 by acquiring Mellon Financial Corporation’s retail banking division across Pennsylvania, New Jersey, and Delaware for $2 billion. This move positioned Citizens as the second-largest bank in Pennsylvania and established it as a significant competitor in Philadelphia and Pittsburgh.

On January 17, 2003, Citizens completed the acquisition of Commonwealth Bancorp based in Norristown, Pennsylvania. Later that year in July, it secured naming rights for the Philadelphia Phillies’ new stadium, which opened as Citizens Bank Park in 2004.

In 2004, RBS purchased the credit card business from Connecticut-based People's Bank, enabling Citizens to begin issuing its own credit cards. A refreshed corporate logo symbolizing its affiliation with RBS was unveiled in April 2005.

In July 2006, Citizens discontinued its Michigan mortgage department and eliminated over 100 positions. On September 1, 2007, most individual banks within Citizens Financial Group were consolidated into RBS Citizens, N.A., with the exception of Citizens Bank of Pennsylvania.

RBS gradually reduced its ownership stake through an initial public offering starting in 2014 and fully divested from Citizens Financial Group by October 2015.

Charter One Financial

In August 2004, Citizens Financial completed the acquisition of Charter One Financial, headquartered in Cleveland. Charter One Financial, the parent company of Charter One Bank, operated branches across Illinois, Ohio, Indiana, Michigan, upstate New York, and Vermont. The transaction was valued at $10.5 billion. Due to the presence of Citizens Republic Bancorp from Flint, Michigan already using the Citizens Bank name in much of Charter One's Midwestern markets, Citizens Financial maintained the Charter One branding in that region. However, branches located in New York and Vermont were rebranded as Citizens Bank. This strategic acquisition elevated Citizens Financial to become the 12th largest bank in the United States, boasting assets exceeding $131 billion and a network of 1,530 branches spread over 13 states.

In early 2005, seven branches in Butler County, Pennsylvania transitioned from the Citizens Bank name back to Charter One, resolving a longstanding 3½-year legal dispute with Butler-based Citizens National Bank. By mid-2005, an agreement was reached wherein Citizens National adopted the new name NexTier Bank, while Citizens Financial restored its branches to the "Citizens Bank" identity.

In November 2008, Charter One divested 65 branches located in Indiana to Old National Bank, which subsequently rebranded these locations under its own banner; this transaction was finalized in June 2010.

Citizens Financial further reduced its footprint in 2014 by selling 94 branches in the Chicago metropolitan area to U.S. Bancorp.

The naming rights conflict stemmed from Citizens Republic Bancorp, established in Flint in 1871 and merged with Republic Bank in 2006, which had previously prevented Citizens Financial from using the "Citizens" brand within Michigan and Ohio. This issue was resolved following FirstMerit Bank’s acquisition of Citizens Republic in 2013 and FirstMerit’s subsequent purchase by Huntington Bancshares in 2016. On June 30, 2014, Citizens Bank announced plans to rebrand Charter One branches located in Michigan and Ohio under the Citizens Bank name. This rebranding was implemented on April 27, 2015, marking the retirement of the Charter One name from its original Cleveland market.

Financial crisis

In May 2008, it came to light that Citizens Financial Group had not disclosed an ongoing investigation by the SEC concerning its involvement in the subprime mortgage crisis—a major factor destabilizing both the U.S. housing market and global bond investors. The SEC targeted financial institutions suspected of trading securities tied to subprime loans.

That same year, Citizens reported a net loss of $929 million and anticipated writing off $2 billion related to non-performing loans. Its parent company at the time, Royal Bank of Scotland (RBS), suffered what became the largest corporate loss ever recorded in British history and subsequently imposed cost-reduction initiatives at Citizens.

In January 2010, a developer based in Philadelphia filed an $8 billion lawsuit against Citizens Bank, accusing it of fabricating default claims to accelerate loan recalls and bolster financial positions amid difficulties faced by both Citizens Financial Group and Royal Bank of Scotland. The parties eventually settled outside of court.

IPO

Following RBS’s nationalization in 2008, speculation intensified regarding whether it would retain ownership of Citizens Bank. By 2012, mounting public pressure within the UK pushed RBS to concentrate on its domestic operations and divest foreign holdings such as Citizens to repay government bailout funds. Among potential purchasers were Brazil’s Itaú Unibanco; Canada’s Toronto-Dominion Bank—which had overlapping branch networks with Citizens east of the Appalachian Mountains—and Bank of Montreal with its U.S. presence. Major U.S. banks including JPMorgan Chase, Wells Fargo, U.S. Bancorp, PNC Financial Services, and Fifth Third Bank were also considered possible buyers.

In February 2013, RBS confirmed intentions for a partial spin-off of Citizens through an initial public offering scheduled within two years. Subsequently, in October 2013, RBS announced plans to sell its Chicago-area branches—accounting for approximately 6% of U.S. deposits—which were ultimately acquired by U.S. Bancorp in January 2014. By November 2013, RBS declared its decision to fully divest from Citizens Financial Group.

Citizens began trading publicly on the New York Stock Exchange under the ticker symbol CFG on September 24, 2014, successfully raising $3 billion. By April 2015, RBS's ownership stake had decreased to 45.6%, further dropping to 23.4% by July before complete exit was finalized in October 2015. Despite this separation, Citizens retained use of RBS’s distinctive "daisy wheel" logo.

In June 2016, Citizens Financial Group entered the Fortune 500 list for the first time.

Misuse of depositor funds

In August 2015, the Consumer Financial Protection Bureau (CFPB) alongside other federal regulatory bodies imposed penalties totaling nearly $35 million on Citizens Bank for failing to fully credit customers’ deposits. From 2008 through 2013, the institution withheld millions from consumers by not applying deposits when amounts differed from deposit slips, despite assurances to rectify such discrepancies, effectively retaining the shortfall. These practices were deemed "deceptive" by the CFPB, FDIC, and Comptroller of the Currency. Citizens Bank was mandated to compensate affected clients and pay approximately $20 million in fines. The New York Times characterized this misconduct as a serious violation, emphasizing the critical role of regulatory enforcement.

Investigation involving Paul Manafort

On May 12, 2017, The Wall Street Journal disclosed that the United States Department of Justice requested transactional data from multiple banks, including Citizens Bank, concerning former Trump 2016 campaign chairman Paul Manafort. In 2016, Manafort obtained a $2.7 million loan from Citizens amid probes into alleged Russian interference in the 2016 United States elections. Following Special Counsel Robert Mueller's indictment of Manafort on February 26, 2018, Bloomberg News reported a 4.1% decline in Citizens' stock value, linking the bank as the "Lender B" that extended $3.4 million in loans to Manafort.

Later acquisitions

Citizens expanded its footprint in August 2018 by acquiring Franklin American Mortgage for $511 million, thereby entering the Tennessee and Texas markets.

On May 26, 2021, Citizens reached an agreement to acquire HSBC Bank USA's East Coast retail operations, including roughly $9.0 billion in deposits and $2.2 billion in loans.

By April 2022, Citizens completed the purchase of 80 HSBC branches located throughout New York City, New Jersey, Pennsylvania, Washington, D.C., Maryland, Virginia, and Florida.

In July 2021, Citizens announced a $3.5 billion acquisition of Investors Bancorp based in New Jersey, adding more than 150 branches to its network. All Investors locations were rebranded as Citizens Bank by February 2023.

Branch locations

Citizens maintains numerous branches inside supermarket chains, prominently within Pittsburgh-based Giant Eagle stores—a presence largely inherited through Mellon Financial Corporation’s retail banking division. Additionally, it operates branches within Stop & Shop and Shaw's supermarkets across New England. These supermarket branches are notable for offering full-service banking on Sundays from 10 a.m. to 3 p.m., a service uncommon among U.S. banks.

In September 2010, Giant Eagle formed a partnership with Huntington Bank to establish branches inside its Ohio and West Virginia stores as earlier banking agreements expired.

On June 25, 2008, Citizens announced plans to divest 18 branches in upstate New York to Community Bank System Inc. of DeWitt, New York, focusing instead on opening 57 new branches downstate; this transaction was finalized on November 7, 2008.

In October 2009, Citizens launched a full-service branch within a Dunkin' Donuts location in Bellingham, Massachusetts, equipped with teller windows, a comprehensive automated teller machine (ATM), and promotional offers linked to the bank’s products and services.

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