Photo by James Sanna | Banker & Tradesman staff
Providence-based Citizens Financial Group plans to use its upcoming acquisitions, including HSBC’s digital bank, to help fuel its expansion nationally.
In addition to acquiring New Jersey-based Investors Bank, Citizens is acquiring 80 of HSBC’s East Coast branches, as well as HSBC’s digital bank. The bank expects the HSBC deal to close on Feb. 18, according to Citizens’ fourth quarter investor presentation, and the transaction with Investors is expected to close in the second quarter.
Both deals will expand Citizens’ New York and Mid-Atlantic presence, and the HSBC deal will give Citizens branches in Florida. As part of the HSBC deal, Citizens is also acquiring HSBC’s online bank.
The acquisition of HSBC will add about $8 billion in deposits. Citizens’ total deposits at the end of 2021 were $154 billion.
HSBC’s online bank will be integrated into Citizens digital-only bank, Citizens Access, which launched in 2018 and has between $4.5 billion and $5 billion in deposits, Citizens’ Chief Financial Officer John Woods said during the bank’s fourth quarter earnings call on Wednesday.
Brendan Coughlin, the bank’s head of consumer banking, said during the call that digital capabilities will lead the bank’s push to expand into the national market. The bank is also integrating its products and services onto a cloud-based platform.
Coughlin said some HSBC digital bank customers did also use physical branches, and this option would continue for customers located within Citizens’ branch footprint.
Bruce Van Saun, Citizens chairman and CEO, said in response to an analyst’s question that the bank has enough scale to compete nationally. He said the bank was making progress in moving to a digital-first bank, noting its extensive partnerships with fintechs. He said staying away from becoming a mega bank would let the bank be nimble, move faster and remain “focused on the things that really matter.”
“Scale does help to some degree … but we don’t feel compelled to have to run out and do more deals to stay competitive,” Van Saun said.
He also said the bank could decide to open more branches.
Citizens had fourth quarter net income of $530 million, up from $456 million in the fourth quarter of 2020.
