Citizens Financial Group

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Citizens Financial Group, Inc.
Traded as NYSECFG
Industry Finance
Founded 1828
Headquarters Providence, Rhode Island, United States
Key people
Bruce Van Saun, Chairman and CEO
Products Financial Services
Number of employees
Several banks are commonly known as Citizens Bank.

Citizens Financial Group, Inc. is an American bank headquartered in Providence, Rhode Island, which operates in the states of Connecticut, Delaware, Massachusetts, Michigan, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island and Vermont.

Citizens was a wholly owned subsidiary of The Royal Bank of Scotland Group (RBS), headquartered in Edinburgh, Scotland, from 1988 until it began to sell its holding in the bank through a phased Initial public offering (IPO). RBS sold its final 20.9% stake in the company in October 2015.

As of 2015, Citizens is the 13th-largest bank in the United States,[1] and operates more than 1,200 branches and approximately 3,200 ATMs across 11 states under the Citizens Bank brand.[2]


Early history[edit]

Citizens was established in 1828 as the High Street Bank in Providence, Rhode Island. In 1871, the Rhode Island legislature gave a second charter to establish the Citizens Savings Bank which eventually acquired its parent group to form Citizens Trust Company. The bank then expanded through Rhode Island, opening a total of 29 branches in that state. It established Citizens Financial Group as a holding company when the bank acquired The Greenville Trust Company in 1954.

In 1985, Citizens changed status from a mutual savings bank to a federal stock savings bank. Expansion into other states began with Massachusetts in 1986.

RBS ownership[edit]

Citizens Bank headquarters in downtown Providence, constructed 1991.

In 1988, Citizens accepted a takeover bid from the Royal Bank of Scotland (RBS), based in Scotland, which used Citizens Bank as a stepping stone into the US market. In the following sixteen years under RBS ownership, Citizens acquired several smaller banks in New England to become the second largest bank in the region. Its 1996 acquisition of First NH Bank saw the Bank of Ireland gain a 23.5% stake in Citizens, which RBS then acquired two years later to resume 100% ownership.

Expansion outside New England began in 2001, when RBS purchased the retail banking division of Mellon Financial Corporation in Pennsylvania, New Jersey and Delaware. In one stroke, this made Citizens Bank the second-largest bank in Pennsylvania, and a major player in both Philadelphia and Pittsburgh.[3]

In July 2003, the bank purchased the naming rights to the new home field of the Philadelphia Phillies, calling it Citizens Bank Park.

On January 17, 2003, Citizens Financial Group, Inc. purchased Commonwealth Bancorp, Inc.,[4] the holding company for Commonwealth Bank, based in Norristown, Pennsylvania.[5]

In 2004, RBS purchased the credit card division of Connecticut-based People's Bank. This purchase allowed Citizens to issue and market its own credit cards. In late 2004, Citizens Financial acquired Cleveland-based Charter One Bank for US$10.5 billion, with branches in Illinois, Ohio, Indiana, Michigan, upstate New York, and Vermont.[6] This purchase made Citizens Financial the ninth-largest bank in the United States with over $128 billion in assets and 1,400 branches across 13 states, and made 25 percent of RBS profits dependent upon the performance of Citizens Financial Group.

On September 1, 2007, the individual banks under Citizens Financial Group, excluding Citizens Bank of Pennsylvania, merged into RBS Citizens, N.A.[5]

Charter One Financial[edit]

Charter One Bank branch, downtown Ypsilanti, Michigan

In late 2004, Citizens Financial acquired Cleveland-based Charter One Financial, parent company of Charter One Bank, with branches in Illinois, Ohio, Indiana, Michigan, upstate New York, and Vermont. Because Citizens Republic Bancorp of Flint, Michigan already operated under the Citizens Bank name in most of Charter One's territory, Citizens Financial elected to keep the Charter One name in Charter One's old Midwestern footprint. However, it rebranded the New York and Vermont branches as Citizens Bank.

Despite the use of the different names, the two banks were otherwise the same. Charter One was fully integrated into Citizens, and adopted an identical logo. The websites for both banks were identical, with the only difference being the name. Citizens customers could bank at Charter One locations and vice versa.

In early 2005, the Charter One name replaced the Citizens Bank banner on seven branches in Butler County, Pennsylvania. This rebranding resolved a 3½-year-old name dispute with Butler-based Citizens National Bank. By mid-2005, Citizens National and Citizens Financial agreed to a compromise. Citizens National Bank changed its name to NexTier Bank, while the Citizens Financial Group branches reverted to the "Citizens Bank" name.[7]

In 2003, Charter One purchased Advance Bank, Inc. with 14 branches in Chicago's southern suburbs.[8] In February 2007, the bank expanded its presence in the Chicago market by acquiring GreatBank, GreatBank Chicago, and First National Bank — all brands of GreatBanc Inc. of Chicago, Illinois. With this acquisition came GreatBanc's 10 banking locations and 14 ATMs throughout Cook, McHenry and Will counties. This transaction expanded Charter One’s presence in Chicago, Skokie and Evanston and provided entry into Olympia Fields, Chicago Heights, Frankfort, Cary and Algonquin.[9]

In November 2008, Charter One sold its network of 65 branches in Indiana to Old National Bank which rebranded them under the Old National Bank banner. The sale completed in June 2010.[10]

January 7, 2014, Citizens announced it agreed to sell 94 branches in metropolitan Chicago to U.S. Bank increasing US Bank's presence in the area from 90 branches to 184 and increasing its area deposits from $6 billion to $11.3 billion.[11] The transaction closed June 23, 2014, and US Bank began to rebrand the branches.[12]

Citizens Republic Bancorp was acquired by FirstMerit Bank in 2013, and subsequently all branches were rebranded as FirstMerit banks.[13] With conflicting names no longer an issue, Citizens Bank announced June 30, 2014, that Charter One banks in Michigan and Ohio would be rebranded Citizens Banks. The name change officially took place on April 27, 2015, bringing to an end the name Charter One in Cleveland, Ohio; the city in which it was founded.[14]

Financial crisis[edit]

On April 18, 2008, RBS revealed that it would post almost $8 billion in losses related to subprime mortgage securities. Less than a month earlier its CEO, Fred Goodwin, denied rumors that losses were possible.[15]

In May 2008, Citizens Financial Group failed to publicly announce that it was under investigation by the SEC for its involvement in the sub-prime mortgage crisis that devastated the U.S. housing market and bond investors around the world.[16] The SEC only investigated banks it suspected of involvement in the purchase and sale of subprime securities.[17]

A Philadelphia developer sued Citizens Bank January 27, 2010, for $8 billion, under a claim that the bank used sham accusations of default to recall loans in an effort to prop up its failing parent companies, Citizens Financial Group and "its ultimate parent, The Royal Bank of Scotland Group."[18]

The Road to IPO[edit]

Following the effective nationalization of RBS in 2008, speculation arose as to whether RBS would retain Citizens Bank. In 2012, public pressure in the United Kingdom grew for RBS to focus on its home market and sell foreign assets, including Citizens Bank, in order for UK taxpayers to earn their money back. Substantial interest in Citizens Bank had been rumored from other foreign banks such as Brazil-based Itaú Unibanco and Canada-based Toronto-Dominion Bank, the latter of which already had an existing U.S. branch network that overlapped with the existing Citizen footprint east of the Appalachian Mountains.[19] The Bank of Montreal, with its existing U.S. presence, was also mentioned as a possible buyer.[20] U.S. banks mentioned as potential Citizens buyers included JPMorgan Chase, Wells Fargo, U.S. Bancorp, PNC Financial Services, and Fifth Third Bank.[20][21]

In February 2013, RBS confirmed at least a partial spinoff of Citizens through an initial public offering within the next two years. Then in October 2013, RBS announced it would sell its Chicago-area branches, which represented 6% of its U.S. deposits;[22] Citizens later agreed to sell those branches to U.S. Bancorp on January 7, 2014.[23] Finally in November 2013, RBS announced that it would divest all of Citizens Financial Group.[24]

The bank began trading on the New York Stock Exchange under the ticker symbol CFG on September 24, 2014, raising $3 billion.[25] By April 2015, RBS Group's shareholding in the bank had dropped to 45.6%.[26] A further sale in July 2015 reduced RBS' stake to 23.4%.[27] RBS sold its remaining stake in the bank in October 2015.[28]

Misappropriation of depositor funds[edit]

In August 2015, the CFPB and other federal regulators levied nearly $35 million in penalties against Citizens Bank "for failing to credit to customers’ accounts the full amount of their deposits". The regulators declared that, from 2008 to 2013, "The bank’s actions resulted in consumers being shorted millions of dollars".[29][30] Joint action by the CFPB, the FDIC, and the Comptroller of the Currency determined that Citizens Bank had engaged in "deceptive practices" by "fail[ing] to give customers their full deposits at times when the size of the deposit didn’t match the number written on deposit slips", despite promising to correct such discrepancies, instead pocketing the difference.[31] The bank was required to reimburse its customers for lost funds as well as pay roughly $20 million in fines to the three agencies.[29] The New York Times said that Citizens Bank's misconduct "is appalling precisely because it is so basic", demonstrating that "regulators like the Consumer Financial Protection Bureau are a necessary defense against a system prone to abuses".[32]


Citizens' branch footprint

Like several other banks, Citizens has agreements with several supermarket chains to locate bank branches in the stores. The greatest number of these are in Pittsburgh-based Giant Eagle stores, most of which were acquired in the acquisition of Mellon Financial Corporation's retail banking division. Citizens also operates branches inside many Stop & Shop and Shaw's stores in New England. One unique aspect at Citizens branches inside supermarkets is full-service banking from 10 am to 3 pm on Sunday, when banks, including Citizens standalone branches, are traditionally closed. This made Citizens one of the first banks in North America to operate on Sundays. In September 2010, Giant Eagle announced a new agreement with Huntington Bank in which Huntington would open branches in several stores in Ohio and West Virginia and will replace existing branches of other banks when the store's agreements with those banks expire.[33]

On June 25, 2008, Citizens Bank announced would sell 18 branches in upstate New York as it prepared to open 57 branches downstate. Community Bank System Inc. of DeWitt, New York purchased the branches in Ausable Forks, Champlain, Fort Covington, Indian Lake, Lake Placid, Lyons Falls, Long Lake, Malone, Newcomb, North Creek, Plattsburgh, Saranac Lake, Ticonderoga, Tupper Lake and Whitehall.[34] The sale completed on November 7, 2008.

In October 2009, Citizens Bank opened a full-service branch inside a Dunkin' Donuts in Bellingham, Massachusetts. The branch offers teller windows, a full-service automated teller machine (ATM) and Dunkin' Donuts promotions for using the bank's services.[35]

Citizens was one of the first banks in the US to use Radio-frequency identification (RFID) technology on its ATM cards, via MasterCard PayPass. In late 2009, however, Citizens began reissuing its cards under Visa without the RFID technology.

See also[edit]


  1. ^ Strauss, Lawrence. C. (March 21, 2015). "Citizens Financial: Ready to Rise After Spinoff From RBS". Barron's. Retrieved August 5, 2015. 
  2. ^ "Our company". Citizens Financial Group. June 30, 2015. Retrieved August 5, 2015. 
  3. ^ Meltzer, Marc (18 July 2001). "Citizens Bank to buy Mellon-PSFS Will take over 345 branches in 4 states, 124 in Phila. area". Philadelphia Inquirer. Retrieved 2014-08-12. 
  4. ^ "Company Overview of Commonwealth Bancorp, Inc.". Bloomberg BusinessWeek. Retrieved 2014-08-12. 
  5. ^ a b "Bank Mergers and Acquisitions". Connecticut Department of Banking. 26 June 2014. Retrieved 2014-08-12. 
  6. ^ "Charter One Shareholders Approve Merger With Citizens" (Press release). Charter One. 23 August 2004. Retrieved 2014-08-12. 
  7. ^ Olsen, Thomas (7 May 2013). "NexTier, Farmers & Merchants to merge, with $1B combined assets, by 1stQ 2014". Pittsburgh Tribune-Review. Retrieved 2014-08-12. 
  8. ^ Quibley, Kelly (16 January 2003). "Charter One to buy suburban bank". Crain's Chicago Business. Retrieved 2014-08-12. 
  9. ^ "CFG Acquisition History". Citizens Financial Group. Retrieved 2014-08-12. 
  10. ^ Newmann, Peter (28 June 2010). "Old National acquires Charter One". WPTA News (Fort Wayne, Indiana). Retrieved 2014-08-12. 
  11. ^ Ruminski, Bill (7 January 2014). "Chicago-area Charter One branches sold to U.S. Bank". Chicago Sun-Times. Retrieved 2014-08-12. 
  12. ^ "U.S. Bank Closes on Acquisition of Chicago-Area Charter One Bank Franchise". The Wall Street Journal (Press release). U.S. Bank. 23 June 2014. Retrieved 2014-08-12. 
  13. ^ "First Merit acquires Citizens Republic Bank". Argus-Press (Owosso, Michigan). 9 June 2013. Retrieved 2014-08-12. 
  14. ^ "Charter One to Change its name to Citizens Bank in 2015". WOIO News (Cleveland). 30 June 2014. 
  15. ^ Larsen, Peter; Croft, Jane & Burgess, Kate (18 April 2008). "Royal Bank of Scotland poised to reveal £4bn loss, May Auction Direct Line and Churchill to raise cash". Financial Times. (subscription required (help)). 
  16. ^ Smith, Mark (12 May 2008). "Royal Bank under investigation over US sub-prime loans". Glasgow: The Herald. Retrieved 2014-08-12. 
  17. ^ Winnett, Robert (20 March 2009). "RBS traders hid toxic debt". The Daily Telegraph (London). Retrieved 2014-08-12. 
  18. ^ Hurdle, Jon (28 January 2010). "Developer sues RBS unit Citizens Bank for $8 bln". Reuters. Retrieved 2014-08-12. 
  19. ^ Colchester, Max; Enrich, David (21 October 2012). "RBS, U.K. Wrestle Over Fate of Citizens". The Wall Street Journal. Retrieved 2014-08-12. 
  20. ^ a b Tascarella, Patty (24 October 2012). "Citizens Bank sale would impact Pittsburgh". Pittsburgh Business Times. Retrieved 2014-08-12. 
  21. ^ Wallack, Todd (11 August 2012). "Ailing parent RBS insists Citizens Bank not for sale". The Boston Globe. Retrieved 2014-08-12. 
  22. ^ Sabatini, Patricia (13 October 2013). "30 Years: PNC eats up market share, boosts Downtown building". Pittsburgh Post-Gazette. 
  23. ^ Bray, Chad (7 January 2014). "Citizens Financial to Sell Chicago-Area Branches to U.S. Bancorp". The New York Times. 
  24. ^ "RBS announces plans to accelerate partial IPO for RBS Citizens Financial Group and fully divest Citizens by 2016" (Press release). Citizens Financial Group. 1 November 2013. Retrieved 2014-08-12. 
  25. ^
  26. ^ Bray, Chad (2015-03-26). "R.B.S. Sells $3.2 Billion in Stock of Citizens Financial Group". The New York Times. The New York Times Company. Retrieved 2015-05-11. 
  27. ^ Bray, Chad (July 29, 2015). "R.B.S. Sells $2.2 Billion in Shares of Citizens Financial Group". The New York Times. Retrieved August 5, 2015. 
  28. ^ "RBS profits rise on Citizens sale". BBC News. October 30, 2015. Retrieved October 30, 2015. 
  29. ^ a b Citizens Bank Fined for Failing to Credit Consumers for Full Deposits
  30. ^ Citizens Bank Enforcement Action: Prepared Remarks of Richard Cordray Director, Consumer Financial Protection Bureau
  31. ^ Citizens Bank fined at least $34.5 million for pocketing customers’ cash
  32. ^ Citizens Bank Shortchanged Depositors (editorial, August 17, 2015)
  33. ^ "Huntington Bank, Giant Eagle ink 15-year deal". Bloomberg BusinessWeek. Associated Press. 29 September 2012. Retrieved 2014-08-12. 
  34. ^ Heath, Dan (25 June 2008). "Community Bank buying Citizens Bank branches". Press-Republican (Plattsburg, New York). Retrieved 2014-08-12. 
  35. ^ Abelson, Jenn (21 October 2009). "Pastries and finance: a match made in Bellingham". The Boston Globe. Retrieved 2014-08-12. 

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