Citizens Financial Group CEO Bruce Van Saun said his company's unsuccessful fight with
"We might have won by losing," Van Saun said in an interview Wednesday in New York. Undesirable assets held by First Republic, including leases, bank branches and billions of dollars in mortgages, are "probably easier to absorb and deal with at
Despite losing out on the acquisition in May 2023, Citizens went on the offense by targeting First Republic's talent. The Providence, Rhode Island-based bank hired 150 bankers last year for six teams in Boston, New York, Florida and the San Francisco Bay area. The company has since increased that number to 250 bankers, including a seventh team in Southern California. "The way we are digesting this and building it up is pretty attractive from our standpoint," Van Saun said.
Now that the bankers are at Citizens, the company is focused on improving its systems and technology to better serve former First Republic customers.
"We brought the people on board, and now we have to build up the technology and the operating frameworks to delight the customer the way they were delighted" at First Republic, Van Saun said.
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U.S. regional banks became the target of increased regulatory scrutiny after the collapse of Silicon Valley Bank and First Republic in the first half of last year. Some firms shrunk their balance sheets to strengthen capital and improve liquidity as heightened interest rates and anticipated tightening of regulatory rules loomed over the sector.
Others, like Citizens, seized the opportunity, going after new clients. Wealth management has been a fast-growing, competitive business, and firms have poured resources into building teams and adding products, hoping to lure new customers who bring with them business opportunities and additional assets to invest.
"While it is competitive, First Republic had carved out a niche there that is still there for the taking," Van Saun said. "And we want to be the person in the land grab to go get it."
Trump tariffs
Bank stocks have soared since President-elect Donald Trump's victory last month, driven by the perspective of lower taxes, lighter regulation and a pro-business environment. But the industry should be watchful of the ripple effect of nationalism on economic matters including inflation and the supply chain, Van Saun said.
The uncertainties around the new administration's tariff policies have come up as a concern in conversations with Citizens customers and within the company, Van Saun said.
Trump said last week that he intends to impose additional 10% tariffs on goods from China and 25% tariffs on all products from Mexico and Canada. It remains unclear if the new tariffs would be phased in or implemented more aggressively, which could result in higher inflation — or if they're merely being threatened as a negotiation tactic, Van Saun said.
"Limiting access or making access to the biggest economy on the planet more costly is a huge negotiating lever," Van Saun said. "And Trump does deals, so is this his way of using his biggest leverage point to get people to bow to what we want?"
But policies specific to banks are likely be friendlier, he said. The new administration is likely to be open to the finance industry's push for less-onerous capital rules, and reviews of bank mergers will probably be smoother under new federal regulators to be appointed by Trump.
"We do have the advantage of having experience with Trump 1.0," Van Saun said. "So we kind of have seen the playbook to some extent. Trump 2.0 should follow some of the same things."
