Citizens Financial Group, a prominent banking institution operating 1,110 branches in 14 states primarily in the eastern United States, has recently launched a private-banking unit that aims to serve clients across the country.
A Promising Start
To establish its new private-banking division, Citizens Financial Group has hired a team of 150 professionals. This team includes 50 senior bankers from First Republic Bank who joined the organization in June. Additionally, 25 individuals specializing in wealth management and private banking have been recruited. The bank plans to set up six private-banking offices in key locations such as New York City, Boston, Palm Beach, and the San Francisco Bay Area. Further expansion throughout the nation is on the horizon.
The private-banking unit has already garnered approximately $500 million in deposits and investments. Citizens Financial Group further revealed that it expects the division to break even in the second half of next year and contribute earnings of 5 cents per share by 2025. Notably, an initial investment of $35 million has been allocated to cover startup costs for the private bank.
Introducing Susan DeTray as Head of Citizens Private Bank
Susan DeTray, a former executive at First Republic Bank, has been appointed as the head of Citizens Private Bank. In this role, DeTray will lead the delivery of financial services to high-net-worth individuals, venture-capital and private-equity firms, private family foundations, and nonprofit organizations. The bank will also cater to multifamily and commercial real estate clients, as well as clients in the life sciences industry. Typically, these clients possess a net worth of $5 million or more.
Leveraging Expertise and Expanding Reach
Citizens Financial Group recognizes the value of its new private-banking unit. By leveraging the expertise of the seasoned professionals from First Republic Bank, the bank intends to bolster its private-client business in various ways. Donald H. McCree, the vice chair and head of commercial banking at Citizens, emphasized the organization’s commitment to client focus and exceptional service.
“Our secret sauce is being client-focused and providing excellent service around everything you do,” McCree stated.
It is worth noting that this private-banking unit joins Citizens Financial Group’s existing nationwide digital bank, Citizens Access, which originated from a financing offer for the purchase of iPhones.
A Service Provider for Family-Owned Companies
Citizens Financial Group is positioning itself as a reliable service provider for family members who own companies. They offer a range of products and services aimed at assisting company owners and their families in various aspects, including M&A transactions and managing the proceeds from a sale.
Crafting Tailored Deals
In a recent deal, Citizens Financial Group successfully facilitated the sale of a stake in a company, accommodating both private owners who wanted to sell out and those who wished to remain. They achieved this by selling a portion of the company to a private-equity firm, allowing some owners to exit while others maintained an equity stake in the company under the new ownership.
More Diversified Options
With a wider array of products and services compared to First Republic, the former First Republic bankers who have joined Citizens Financial Group will now have a more diverse range of offerings to provide their clients. This expanded offering will allow the bank to better serve its customers’ needs.
Opportunities in Wealth Management
Citizens Financial Group sees significant potential in the wealth management space. The bank believes that catering to the money-management needs of baby boomer women, who are projected to control around $30 trillion in wealth over the next decade, presents a valuable opportunity.
Despite challenges faced throughout 2023, Citizens Financial Group remains focused on its growth strategy. The company’s stock has experienced a decline of 36% this year, while the SPDR S&P Regional Banking exchange-traded fund (KRE) has dropped by 30% and the S&P 500 (SPX) has risen by 11.7%.
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