Citizens Financial at BancAnalysts Conference: Strategic Transformation Insights

On Thursday, 06 November 2025, Citizens Financial Group Inc (NYSE:CFG) presented at The BancAnalysts Association of Boston Conference, revealing strategic transformations aimed at boosting growth and profitability. The bank’s focus on optimizing branches, strategic acquisitions, and enhanced lending products was highlighted, alongside efforts to manage costs and improve efficiency. While the outlook is positive, challenges such as expense management and economic pressures remain.

Key Takeaways

• Citizens Financial is undergoing a strategic transformation from a large thrift to a relationship-based institution.
• The bank’s private banking sector has exceeded expectations, contributing 7% EPS accretion this year.
• A focus on high-quality deposits and loans is emphasized, with a strong position in home equity lending.
• The "Reimagine the Bank" initiative aims for $400 million in savings over three years.
• New York Metro expansion shows promising deposit and customer growth following acquisitions.

Financial Results

• Segment Return: Improved from mid to high teens pre-COVID to mid to high 20s, with expectations to reach the 30s.
• Private Bank: Currently 7% EPS accretive, surpassing the 5% target, with medium-term goals of mid-teens growth.
• Wealth Business: Fee income increased from $50 million per quarter in 2020 to $93.5 million last quarter.
• Credit Cards: Business size is nearly $2 billion, with aspirations to grow to $3 billion, yielding mid-20s or higher ROE.

Operational Updates

• Branch Network Optimization: Reduced branches from 1,400 to 1,000 to streamline operations.
• New York Metro Expansion: Integration of HSBC and Investors Bank led to high single-digit deposit growth and mid-single-digit customer growth.
• Private Bank Growth: Increased from 150 to over 500 bankers, focusing on high-quality deposits with a Loan-to-Deposit Ratio of 60%.
• Home Equity: Citizens leads in U.S. originations and balance sheet growth, outperforming larger banks despite operating in only 14 states.

Future Outlook

• "Reimagine the Bank" Initiative: Expected to generate $400 million in savings over three years, enhancing ROTCE and NIM in the medium to long term.
• Credit Cards: Plans to focus on higher-returning assets within the existing customer base.
• Growth Plans: Continued expansion of teams in both wealth management and banking sectors.

Q&A Highlights

• Expense Concerns: Growth rate in expenses will align with current year levels, with early wins expected to offset investments.
• Private Bank Satisfaction: Achieved a Net Promoter Score of 76, underscoring strong client satisfaction.
• Private Bank Returns: Driven by high-quality deposits, a 60% Loan-to-Deposit Ratio, and accretive balance sheet margins.

For more detailed insights, please refer to the full transcript below.

Full transcript - The BancAnalysts Association of Boston Conference:

Unidentified speaker: Good afternoon, and thank you, Gerard, for all that you do to put on this great industry conference. Given the mayoral election in New York City this week and the return of power to the great people of that city, I thought some trivia was in order. Did you know that today there are still 215 banks in the United States that have the word "Citizen" in their name?

Brendan Coughlin, President, Citizens Financial: Only one that matters.

Unidentified speaker: Exactly. Here with us today is the largest of that group, Citizens Financial, which has a $22 billion market cap, is $223 billion in assets, and is headquartered right here in New England. Citizens is a bank on the move since Royal Bank of Scotland fully sold out of the bank 10 years ago. Citizens has gone significant operational improvement, added a lot of talent, and launched a number of growth initiatives, one of the latest being the build-out of a private bank. Citizens has strong management that is both an opinion and a fact. Personally, I think the leadership of this bank and the improved quality of the franchise remain underappreciated. If I just simply look at market beta of the stock, which remains the highest of the super regional banks at 1.34.

Joining us here today is President Brendan Coughlin, who oversees consumer banking, private banking, and wealth management, as well as several key enterprise functions. Just one note, we will, as the other presentations have, time for audience questions in a bit. Thanks.

Brendan Coughlin, President, Citizens Financial: Great. Thanks. Thanks for having me.

Unidentified speaker: I’ll start off with the first question on consumer strategy. Citizens talks about its three-pronged strategy: best-positioned commercial bank, a transformed consumer bank, and building a private bank and private wealth franchise. You’ve been involved five or six years in these businesses. Can you walk us through where you stand now in the transformation of the consumer bank in terms of the customer base, the quality of the deposit franchise?

Brendan Coughlin, President, Citizens Financial: Yeah, absolutely. I won’t go too far back in the wayback machine, but when we brought the bank public, Citizens, particularly in the retail side, very much looked like a very large thrift. A lot of acquisitions that were not totally put together, unhealthy deposit base, interest-bearing costs that were too high, not enough operating deposits, branches that we had too many of them. We have gone on a 10-year journey to bring it from a very large thrift to a relationship-based, much more profitable institution. I’ll talk for a second about the foundation we have built and then the jump-off point on where we are going. Pre-COVID, the business, from a segment return standpoint, was in the mid to high teens. Now the business is in the mid to high 20s on its way into the 30s if you look at it on a segment basis.

The profitability has improved markedly. When you look at our branches, we’ve done a couple of acquisitions in Metro New York, Investors and HSBC’s U.S. franchise. If you add that to the branches that we had starting at our IPO period, we would have had 1,400 branches. We actually have 1,000 now. We have done a lot of cost pruning where we’ve had an abundance of redundancy in the network and reinvested that back into technology. We have been innovative in consumer lending, student loan refinancing with partnership with Apple on Buy Now Pay Later. Now as we think about the path forward, really our principles are to create durable relationship-based revenue that is sticky and will drive a higher valuation for the franchise. It all starts with deposits.

The last time we had a mini upcycle in 2015, Citizens performed worse than the industry in the top 25 banks in terms of deposit beta and deposit quality. Here we are at the end of this cycle starting to go into rate reductions, and we’ve performed top quartile in the industry. Really, and with consumer being 70% of the deposit at Citizens, it’s really a consumer story. We’re top third in the U.S. in the top 25 banks in the U.S. in terms of net deposit costs, whether you’re looking at that total deposit cost or whether you’re looking at that on interest-bearing deposit costs. Going from worst to top third in a 10-year period is pretty remarkable. That’s a relationship-based strategy. I tell people a lot that customers don’t wake up every morning looking to just put a bunch of non-interest-bearing money in the bank.

They do that because you’ve surrounded them with the right customer experience. That’s been the foundation of our strategy. Now we look to re-pivot our balance sheet on the lending side to higher yielding, higher returning relationship-based business. We’ve put a bunch of loans into runoff, non-core loans that we’ve purchased, the auto lending business, which was non-relationship-based, and we’re rotating into things like HELOC, where we have a number one in the U.S. market leading position, starting to grow credit card. You’re starting to see a franchise emerge that is valuing cross-connection of products, higher returns, durable relationship-based banking, all with the foundation of a much, much, much healthier deposit franchise.

Unidentified speaker: Keeping with consumer private banking, you launched the private bank a few years ago with the hiring of 150 former First Republic bankers. Can you walk us through the strategy for building the franchise and where you’re headed?

Brendan Coughlin, President, Citizens Financial: Yeah. We were self-reflecting on the bank and the progress as we kind of got through the mid-part of COVID. The one area that we were really, we had made some progress, but not enough was wealth management. We had a strategy that we started to formulate on making a bigger play there. The bank failures in 2023 happened, and it was opportunistic for us that it lined up with where we otherwise wanted to go. No secret that we were part of the bidding process for First Republic. Didn’t quite go our way in the end, but what was very clear was that the talent that was there really wanted a more intimate bank that could value that single point of contact. The bigger GSIBs just have a hard time with.

Larger silos and the bureaucracy, and it just could not bring together the customer model. We struck while the iron was hot. We brought 150 of the best folks of First Republic over to start the private bank. We are now up to over 500 bankers, and it is going tremendously well. I think many of you might first react to the growth that we are seeing, but I would actually start with the quality of earnings. We disclosed at our earnings call last quarter that this will now be 7% EPS accretive to the bank this year. Our target was 5%, so we are going to exceed that. It is going incredibly well. We sort of view this as our version of M&A. We did not have to do a TBV dilutive deal. We hired a bunch of folks. We took a little bit of an EPS hit in 2023.

Now the seeds that we’ve planted are really paying strong dividends. The returns of the business between 20% and 25% are not only growth accretive, but they’re ROE accretive. You’ve got EPS and returns accretion. We launched this business saying, "Look, there’s a couple of principles that we want to go at. We want to grow at the speed of quality, not earnings growth. It’s going to be fortified by high-quality deposit franchise, which we’re running the business around a 60% LDR with 42% of the deposits in DDA or CWE, which also is accretive from a mixed standpoint. We’re growing deposits that are in accretion to Citizens’ overall quality position and then growing high-quality loans with very low loss content. This has then positioned us really well in the wealth business. While we hired bankers upfront, it’s really put us on the map.

We’re getting inbounds now from wealth advisors that candidly wouldn’t have returned our call in the past, and now they’re calling us. We’re getting some of the very top wealth advisors, the top 1% in the United States and the private wealth, to come into the ecosystem to really work with us. Our view is that our right to win in this space is at the intersection of banking and wealth management. Bringing it together with that single point of contact sounds like motherhood and apple pie. It’s really, really hard to pull off, to both have all the sophisticated capabilities, but be nimble enough to value the customer at the intersection of their lending needs, their business needs, their personal banking needs, and their wealth management needs.

We still feel like there’s tremendous white space here that we seem to be the only one really leaning in. We are excited about it. We are confident in our ability to hit our metrics. We’ve already exceeded our deposit metric, our very ambitious deposit metric. We’ve exceeded our earnings accretion metric, and we think the growth will persist in the future.

Unidentified speaker: Are there any key differences in your go-to market with these folks? Obviously, First Republic was big with the jumbo mortgages, variable-rate mortgages. Is there any different key go-to?

Brendan Coughlin, President, Citizens Financial: Yeah. I do not often like to speak ill of the departed, but. Look, we are going to price our loans at market rates, and we are going to win on relationships. We are going to make sure we grow at the speed of LCR, high-quality lendable deposits, and not get out over our skis. We are going to have an expense policy that is in line with Citizens’ appetite versus the perception of where First Republic was. The biggest difference from our standpoint is I want to grow a franchise that has profitability accretion, that has strong control, that the risk appetite of it is very durable. If over time, that means we are going to grow slower, then so be it. Right now, we have been able to have our cake and eat it too and grow really strongly.

The principal guardrail for us is the quality of earnings, the risk management of the balance sheet, and how we’re putting the business together. Yeah, that’s, and I would say that. In the recruiting of the teams, personally, I was very direct with them to the point of, if I scared anybody off, then so be it. This is the business that we’re going to win with. You’re seeing that in the numbers. Instead of the perception of we’re leading with undercut, low-priced mortgages, we’re leading with high-quality operating deposits. The mortgages and business loans come later, which is driving an LDR of 60, which is great. There are a lot of differences here. I mean, just think about the ROE profile of FRB. I think it peaked at 11%.

We’re only two years into this, and the business last quarter was in the mid-20s for us, just two years in. The earnbacks, we’ve already earned through the full EPS hole we’ve dug. It’s been profitable for, I think, 13 or 14 months in a row. That’s a better financial profile than any M&A deal we could have thought about doing.

Unidentified speaker: The private bank has been adding clients and AUM by bringing on wealth advisors onto the platform, like you mentioned. How much more runway do you have for them to bring their existing clients onto the platform?

Brendan Coughlin, President, Citizens Financial: Yeah, a lot. Maybe I’ll answer two ways. One on the banking side and then dive into wealth for a second. The books of business that the bankers that we originally hired, while I don’t have precise numbers, they had in excess of $50 billion in deposits before their old place disappeared. We’re excited about the $12.5 billion we have. In other ways to think about it, we’re just getting started. We’ve earned back some of their old relationships, but we’re also starting to see clients come in that weren’t on their old legacy client list. The brand is resonating. The platform we built is resonating. We have a tremendous amount of running room on the banking side. We’re opening up private banking offices, and we’re adding new teams week over week.

On the wealth management side, we have a lot of running room to go. We have been on a tremendous growth journey, particularly the last five years, but we remain undersized versus our peers. It is a story of growth, yet still massive opportunity in front of us. The overall wealth business in 2020, when I took it over, was printing about $50 million a quarter in fees. We printed $93.5 million last quarter. It is almost doubled in a couple of years’ time. We have grown about twice the rate of market appreciation in terms of our fee growth. That has been on both sides of our wealth business. We have about 400 advisors that sit in retail branches that do mass affluent and low-end affluent wealth management. That has also been growing quite rapidly.

On the private wealth side, we bought Clarkfeld Advisors in New York, which provided a great RIA platform. Now we have nine teams that we’ve hired, private wealth teams. In fact, in 2024, we did the biggest liftout that I’m aware of of a team across all wealth management, including the National Wires in U.S. wealth management, brought a team over that was almost $5 billion in AUM onto the Citizens platform. We’ve done eight more of them after that. We’re getting an attraction of clients. We’re getting an 85%-90%+ of client migration, followership to those advisors that come on board. There’s still more to go.

Our pipeline of talent that we have lined up to talk to us about joining the platform is really robust because they see what happened at the old First Republic model where these bankers that we’ve hired are such great business development officers that the wealth referrals become incredibly strong and incredibly important. They can double the size of their own personal book of AUM. The attraction to the business is quite strong.

Unidentified speaker: Can you just touch on the wealth referrals to bankers or vice versa?

Brendan Coughlin, President, Citizens Financial: It actually goes both ways. We have been clear to the bankers and the wealth managers that we are bringing on, we have no interest in this business being two ships passing in the night that every once in a while they refer to one another. Back to our durable right to win, it is at the intersection of banking and wealth management. The wealth managers that we bring on, we make it really clear to them that the reason they are here is to partner with the banking team and refer business back to the bankers. We do not get very excited about a single-service wealth customer. We want them to have their private banking with us too. Vice versa, if we are going to give you credit, we want you to bring your wealth management to us. The referrals have been very strong.

I’d say in the retail network, the branch network, our referral volume is up about 100% this year. Our core of our branch network business is really starting to fire on all cylinders. Our right to win in retail banking, we think our strength is going to be in the mass affluent customer segment. The wealth business becomes a critical piece of that pie, and that’s really starting to pay off. You’re seeing that through our fee income. On the private banking side, we’re up 50%-70%, depending on the quarter, on net wealth referrals this year from the private bankers from just last year. The business model, if you can imagine, we have some private equity bankers. We have some traditional personal private bankers. We have some folks that focus on real estate, particularly in the private equity banking side.

The model is first you bank the fund, then you go in with partner loans, and you bank the GPs and the LPs, then you earn the private banking, and then you get the wealth management. There is a very thoughtful cycle here. We have got the funds banked. We are starting to get the PLP partner loans in. We are starting to get personal private banking from the GPs and LPs. Now you are starting to see the wealth flow through. To have it all work together, we need the wealth talent, which is what we have been rapidly working on on these nine teams we brought onto the platform.

Unidentified speaker: Let’s see. New York Metro, you entered a few years back with the acquisition of HSBC’s East Coast locations, and then you acquired Investors Bank. Can you update on how that’s going and what it’s like to compete in the New York market?

Brendan Coughlin, President, Citizens Financial: Yeah. Going into the belly of the beast, as I like to say in New York, the most competitive financial market in the world was not for the faint of heart. We really thought our New England franchise had a big hole in the footprint. It’s hard to position yourself as you want to be a preeminent super regional bank in the U.S. with a strong Northeast focus and not have a presence in New York. The perfect opportunity presented itself with HSBC. Rates were really low. Deposits were not something that most banks were focused on. We were able to acquire a very strong deposit franchise for not a lot of money. The one-two punch of Investors to put those two franchises together really, really worked for us.

We ended up with about 200 branches in the Metro New York and Northern New Jersey area. Candidly, both of those firms were fixer-uppers. We were able to get them for relatively inexpensive prices. The deal math worked without putting in any revenue synergies. We are seeing revenue synergies. We have been growing deposits in the retail franchise in the high single digits for a couple of years. We have been growing our customers in the mid-single digits. The branches that we got for HSBC, just to give you some relative metrics, were about 50% the size of a legacy Citizens branch. The branches for Investors were about 10% the size of a typical Citizens branch. Both of those numbers have dramatically improved. HSBC branches are almost at the size of a Citizens legacy branch now. Investors’ branches have got to about 50% of Citizens size.

We’re winning. We’re winning market share. Look, the big banks are all over. Manhattan in particular. But so are a lot of smaller banks. You see us taking market share. It’s not all the easy perception is how you’re going to win against JPMorgan Chase. I think we are actually, but we’re winning against a whole bunch of other banks too. It’s been our fastest growing market for now two years going across all of our different segments, retail, commercial, as well as business banking.

Unidentified speaker: Health of the consumer from your vantage point, what are you seeing with respect to the health of the consumer? What is your view on the economy?

Brendan Coughlin, President, Citizens Financial: Yeah, I’m probably not going to break any news here, but hopefully give you some confidence on what we’re seeing. It’s a K-shaped economy, without question. You’re seeing significant stability and growth in the high end and some moderate signs of stress in the low end. Keep in mind that Citizens’ business model, particularly on retail, is to participate in the mass affluent and above segment as a strategy. So we don’t have a lot of exposure to near prime, subprime. If you were to look where any stress might be emerging, it’s there. I have a view on it, but we don’t really have empirical data on the Citizens portfolio that would confirm it or not. The things I look at, a couple of things, macro, you’ve got consumer sentiment that is not in the greatest spot.

You’ve got unemployment that’s still relatively contained, but it’s growing a little bit, 4.3%, up from 4.1% a couple of quarters ago. Generally stable, but a little bit of signs of things to watch. When you look at the business inside of Citizens, look at credit and then deposit liquidity. On the credit side, there’s almost nothing I’m worried about right now. On the consumer side, we were in the mid-50s for NCOs a couple of years ago. We’re now in the high 40s, on our way to the high 30s over the next 18 months. Some of that is our non-core rotation out of auto, but some of that is just good old credit metrics normalizing post-COVID. The only blip that we saw was in unsecured credit, the 2021 and 2022 vintages, which everybody in the industry saw with the FICO inflation had modest blips.

That’s pretty much run its course. I see delinquency stable to coming down, NCOs stable to coming down. No individual portfolio do I see anything that would suggest there’s any cause for concern? When I look at the deposit side of the business, I like to compare back to pre-COVID a lot just to give us relative metrics. The top 25% of our portfolio still has 25%+ more deposits than they did pre-COVID. A lot of wealth creation, a lot of trapped liquidity through COVID. The bottom 25% is back to pre-COVID levels in terms of net deposits, in some cases maybe even a little bit lighter. If you adjust that for inflation, you could argue that maybe they’re actually in a little bit of a worse spot than pre-COVID. Having said that, there’s not anything that I’m systemically worried about.

I don’t think that’s going to translate to anything from a macroeconomic standpoint. It’s just a watch item. We’re seeing very modest elevation of things like overdraft instances, which is driving a little bit of fee improvement for the firm. That’s something to watch. There’s nothing that looks like there’s a breakout happening in any way. Certainly if there was, we don’t have the credit exposure for that segment on the books.

Unidentified speaker: You recently announced the multi-year reimagine the bank initiative, which you’re leading. Can you talk a little bit about expected costs and benefits, and then tie in AI a bit to that and the broader consumer strategy?

Brendan Coughlin, President, Citizens Financial: I’m really excited about this program. Citizens has had a long-standing program we call Project Top, Tapping Our Potential. Twice in our history, we’ve done upsized versions of this. Our first Top program was when we brought the bank public. Our Top Six program was in 2019, which was in response to the digital transformation that then also morphed into a COVID response program as well. Those were three to four times the size of a normal Top program for us. We took a step back and said, it feels like the right time now to do that again, to have a bolder aspiration on what we want to do with the bank and take a longer-term window for benefit realization. Me and a few folks over the summer kind of locked ourselves in a room and said, what would this look like?

I’d say there’s two reasons for why now. One is it’s been five or six years since we’ve taken a fresh look at it. There’s a lot of things when you take a three- to five-year window that you might do differently than a one- to two-year window. Outside of the realm of AI and technology, we’re looking at things like massive vendor simplification, strategic renegotiation with our big suppliers, a cleanup of corporate facilities, being responsive to the post-COVID return to office dynamics. We’ve got vacancy in buildings that we can collapse and take some cost out, reinvest that back much more strategically. There’s a set of things like that that are highly strategic, but they’re not technology-led. There’s a set of things that are very much technology-led and heavily AI-led. We’re looking at.

How to deploy generative AI, agentic AI in a number of different spots, and really zero base our operations to have a win-win, huge net promoter score accretion, huge colleague engagement accretion, risk management improvement, and cost base improvement. We will give a lot more details as we do earnings in January and guidance for next year. We expect the program to be $400 million in size or better in terms of run rate over a three-year window. We also expect the 2026 impact to be negligible to our trajectory. You should be thinking about us. We have been very clear on our guidance that we are going to get to a medium-term ROTCE between 16%-18% and a NIM between 3.25%-3.50%. This should not in any way take us off that in the short or the long term.

In fact, the medium to long term, this should be accretive and icing on the cake to that guidance. Because this is an investment-led program, so that we’ll take technology capital to deploy AI and so on and so forth, the expense recognition will be capitalized and will be linked to the benefits we see. Because of that, that’s why you should be confident that kicking off this program is not going to have this big cost bubble in the short term that we have to get through a J curve to see the benefit realization. We’ve spent a lot of time financially engineering this, and we have a lot of conviction around the long-term benefits as well as the short-term neutral impact to the franchise.

Unidentified speaker: Back to deposits, can you walk us through pricing and optimizing deposits across the different channels, digital bank, retail, Citizens Access, and the private bank?

Brendan Coughlin, President, Citizens Financial: Yeah. We have more levers than we’ve ever had, and I think more levers than most banks have. Back to when we were mostly a big thrift, we had one lever, and that was put a poster board on the retail branch, and you get a bunch of CDs that come in, and you end up with a heavy-priced franchise. Citizens Access, many of you remember we launched a number of years ago. That was a great tool to drive deposits, gain new customers. What it also did was it allowed me to protect the retail franchise to be relationship-oriented. If I wanted to raise deposits, I could do it in a contained way with Citizens Access and really restructure the retail franchise to be based really focused on durable relationship-based DDA banking that then when you have interest-bearing relationships, it’s tied to a full relationship.

You’re willing to do that versus a rotating hamster wheel of hot money that you’re constantly replacing. That gave us a real strong lever for deposit cost management. The private bank gives us yet another one. I mean, we’re at $12.5 billion in deposits with 42% DDA and CWE. You can see our underlying DDA numbers getting better on an absolute basis and getting better on a relative basis versus other peers. That’s a multi-phased strategy with consumer getting healthier, the private bank growing and growing in a really healthy way. All of these things lead us to a lot of optionality to manage our costs, which is what’s putting us in the top third of the U.S. in terms of the top 25 banks in terms of deposit cost management success.

What also probably hasn’t got as much notability is when you look at wholesale funding, we’ve drained down most all of our wholesale funding at the bank at the moment because we’ve had so much success driving high-quality relationship-based banking. When we’re lending, it’s tied to real healthy deposits that we’ve driven. We’ve got a lot of dry powder from a liquidity standpoint if we ever needed it. That’s been another benefit of having all these levers of deposit growth, to really restructure the treasury balance sheet to have a much healthier position.

Unidentified speaker: Credit cards, you recently launched a new credit card suite. Can you talk about the strategy there and what the ambitions are in terms of size?

Brendan Coughlin, President, Citizens Financial: Yeah. Our credit card business was and is undersized. We think we have running room to grow there. It is a little less than $2 billion in size today. It is modestly undersized when you look at peers in our kind of asset zone. It is obviously a very high-returning business. It is mid-20s to higher ROE business. It also drives fee income. It also importantly drives very sticky relationship-based business. When you pull your brand out of your wallet or purse every day, that is really accretive for the franchise. We viewed it as a big opportunity. We had a very simplistic product set. We had a cashback card and a revolve card. We just launched a brand new product suite, four new cards ranging from.

A card we call AMP, which is for new and emerging credit for students, all the way up to a private banking metal black card and a product we’re calling Summit Reserve, which is another metal black card that competes with from a reward standpoint and a product value proposition standpoint with Chase Sapphire and Amex Platinum. We’re really excited about it. We’ve got about a 100% growth rate so far over our past run rate on new card sales, and the activation and activity on the card is really, really strong. We are off to a great start. Sometimes it’s better to be lucky than good. We launched the high-end product suite in the same week that JPMorgan, Sapphire, and Amex increased their annual fees into almost $1,000 range. We launched this product at $295.

It will be waived if you have a strong relationship with Citizens and equivalent sort of value proposition. Our aspirations are to be bigger, but stay within a relationship-based framework. Could I see this business getting to $3 billion or bigger over the medium term? Yes. Do I have aspirations to go compete nationally with Amex and JPMorgan on cards? Absolutely not. This will be a good, strong, healthy growth vertical for us. It will drive higher yields. It will help us remix our balance sheet to higher returning assets. We’ll stay contained into our bank customer base as we distribute it.

Unidentified speaker: Home equity, you guys are big in home equity. Can you talk about the strategy and the growth opportunities there?

Brendan Coughlin, President, Citizens Financial: 74% of the U.S. has a mortgage below 5%. Home equity has been an area Citizens has always been good at. We made a very strategic investment three years ago with data and analytics on a program we called FastLine, where basically you need four things with home equity. You need the property valuation, you need a clear title, you need your credit score, and you need income. We can get all four of those things with data and not ask the customer for it, which we’ve done. We have taken out a ton of operating costs in terms of underwriting, but most importantly is we’ve created a value proposition where this is underwritten and you get money as fast as a personal loan, but it’s a home secured loan with a liquidity line at rates that are attractive.

We’re pricing middle of the pack versus peers, and we’re number one in the U.S. in originations and balance sheet growth for seven or eight quarters running with publicly available data, including outrunning all the money center banks. By the way, we only originate in 14 states. They originate in all 50 states. We are quite certainly the nation’s leader in HELOC lending. Our credit strats are very strong. We skew first lien. 35% or so of the business is first lien, that’s different from other banks. Our average FICOs are in the high 700s. Our CLTVs are below 60%, and there’s de minimis tail risk in the book in terms of higher LTV lending. We’ve been able to have an incredibly clean, super prime, first lien oriented position, and sort of dominate on the originations front for quite some time.

I think the forward rate curve would not suggest mortgage rates coming below 5%. If you take the medium-term outlook, we have got an incredible competitive advantage. The market is likely not to get back to a refi boom. This is going to be the way U.S. consumers tap into home equity, and I think it should position us for strong, high-returning loan growth. Also, we do not do a home equity line without a checking account. It is also driving low-cost deposits with a mass affluent oriented customer base. It has really served as a strong acquisition vehicle for us for the consumer bank overall.

Unidentified speaker: All right, I’ve got another question, but we can open it up now. We’ve got nine minutes left. I don’t know if we can grab the mic. He’s coming, right?

Hi, my name is Gus Ali, Morgan Stanley. You spoke about reimagine the bank not being a significant impact of 2026 expenses. I mean, I think one of the concerns from investors has been not that you wouldn’t get to your ROTCE targets that you would in 2027, but there would be more of a J curve to getting there. So A, can you confirm that that’s not the case? And B. What are the offsets to the expenses that would come through for reimagine the bank?

Brendan Coughlin, President, Citizens Financial: Yeah, I can confirm that. Look, we’re looking at our expense growth rate. Bruce shared this at our earnings call, our expense growth rate for next year being kind of generally in line with our expense growth rate from 2025. That includes the assumption of the investment in reimagine the bank. But net net, while we’re investing in capital and we’re investing some in OpEx for some of these initiatives, it’s being self-funded by some very early quick wins on vendor contract restructures, exiting some facilities that we don’t need anymore. There’s a sort of 40-something initiatives that we’re going at, and we’ve put the mosaic together in such a way that some of these quick wins are offsetting areas where we need to invest to get the financial profile of this to be de minimis, which, by the way, includes any one-time.

Hits that we would take, whether it’s investments or write-offs. We’re going to net it all to you. We’ll be transparent about that, but as we talk about the impact to Citizens, it’s implied that all those things are included. You’re not going to have some separate bucket of one-times in addition to this. When you look at it all together, our guidance around expenses will be in line with this year’s number. It would include reimagine the bank, but the reimagine the bank piece, netting those quick wins with the investments that we’re making will be actually somewhat de minimis too. Sure.

Unidentified speaker: All right, next up, I guess Steve Edison first. Before.

Hi, Brendan, Steve Alexopoulos.

Brendan Coughlin, President, Citizens Financial: I had two questions on the private bank. A lot of banks studied First Republic’s service model, but could never get close to their client satisfaction metrics. Where are you guys today? Are you even close to where they were? That is a first question, so I’ll start with that. 76 MPS. They peaked in the 80s. 76 by all accounts is world-class. I would say we still have work to do. The platform is very strong. Obviously, the talent that we brought on board is driving a lot of that. We’re making operating platform enhancements. We had all the product capabilities, more so than First Republic. The work to be done was integration across, connecting the plumbing. These customers that have commercial real estate needs, they’ve got deposit needs, they’ve got wealth needs. All those businesses operated somewhat independently at Citizens.

Bringing it together to put these bankers in a position to deliver it all together was the work to be done. That has a lot of investment has happened. There’s more to do. What we hear from clients, just to maybe simply summarize it, is this feels very familiar to us from First Republic. There’s a few things that you guys need to do better, but when I look at where you’re at compared to all the other options, nobody is even remotely close. We feel great about the path we’re on. We’re not satisfied that we’re at where we need to be, but 76 is not bad.

Okay. That’s helpful. The other question, so when I look at the returns, 20-25%, I never thought First Republic could ever get close to that. The teaser rates are a portion of it, but just adjusting those rates does not get you to 20-25%. Can you talk about what else you’ve done to unlock the return to that business?

The biggest piece of that is the deposit quality and the deposit-led nature of the business. If you look at what drives ROE, the fact that we’re at a 60% LDR. Obviously, the capital intensity is lighter than a business that might be running in an 80% or 85% LDR. The high quality of deposits with leading with deposits and wealth and not needing to put out as much capital is really one piece of it. The margin on the business we’re doing, while I don’t have First Republic’s balance sheet memorized, we’re around a 4.5% margin, maybe 4.4, 4.3, something like that, but around a 4.5% margin, something like that between the yields that we’re putting on for loans and the deposit costs that we’re paying. That is NIM accretive at the top of the house too to Citizens. If you look at.

Less capital intensity, fee income coming from wealth, really strong balance sheet margin that should give you confidence. We’re not giving away credit. Even when we’re deploying credit, we’re not giving away credit to get the deposits. It’s coming from a relationship-based strategy. That’s the formula for a high-returning business. Over a long period of time, look, I don’t expect to run it at a 60% LDR forever. That will tighten a little bit. We still think that the fundamental quality metrics of the business should keep us in that range of 20% plus business.

Unidentified speaker: All right, Scott.

Thank you. Hey, Brendan, Scott Seefers. A couple of questions also related to the private bank. So you’ve gone from 150 to about 500 people. As we get farther away from the First Republic event, does it get easier to add teams because you have a reputation, or is it harder because there’s just less movement? And then as you look at this initiative getting to potentially double digits or more of the bank’s earnings stream, is that going to be more a function of continuing to add advisors, or is it just sort of more capabilities and seasoning within the existing advisor pool?

Brendan Coughlin, President, Citizens Financial: Yeah, I’ll take the last one first. It’s both. We think that the existing teams we have have a lot of running room to build their own scale that should drive us. We think we can double over the medium term. If we’re at 7% EPS accretion today, can that get into the mid-teens, 15% over the medium term? Yes. Obviously, keep in context that that is also given a growing Citizens overall. Percentage share bigger inside of a growing bank, we think there’s a lot of running room. Also, we plan to add teams, both on the wealth side and the banking side. You might have seen over the last two weeks, just yesterday, we announced the Southern California Wealth Team, $800 million team. The week before, we announced the hiring of a banking team in Southern California in Beverly Hills.

We’re finding these selective opportunities to bolt on talent. What was holding us back, even though we went from 150 to 500, if we were held back, was a couple of things. One is I wanted to deliver to all of you and our investor base that we could build a profitable business. The further you’re continuing to invest in the J curve, the further you push out showing that this can be profitable. That’s one lens. We wanted to really decisively say this is going to be a 20% ROE business plus. We’ve delivered that. Secondly is the customer experience platform. We did need to invest in it before we would add a ton of scale to it, which we’ve principally done.

We feel good now about growth, and we will continue to selectively add teams in the markets we’re in and maybe start to branch out into new markets. The point around distance from FRB failure. We’ve all been exhausted the team that we want from the old FRB platform. Some of them are scattered. Some of them stay at JPMorgan. If we find onesie-twosies that still we missed, maybe we’ll look at them. The talent growth strategy from here is more likely than not going to be non-FRB employees. The talent is out there. It’s available. What we are building a mindset of is how to now immerse them in the culture of service and that sort of white glove, no holds barred service model, which a lot of banks say not all banks do.

Getting the right people that know how to do that or are willing to be trained to do that is going to be the job to be done to make sure I have no doubt we can hire teams and scale. It is hiring teams and scale inside of the context of the culture that we are trying to build around the service model that will require a little bit of a different muscle than just recruiting all folks in that were already in that business for a long period of time. We are convicted that we can do it, and we are getting looks from non-FRB bankers that want to be part of this. The first set of interview questions is let’s talk about the customer experience standards that we are going to set here.

Unidentified speaker: All right, we are out of time, but I really want to thank you again for you and your team for coming to the conference again. They’ll be at the back if anyone has any follow-up questions.

Brendan Coughlin, President, Citizens Financial: Oh, thanks. I appreciate it. Thanks, everybody.

Unidentified speaker: Yeah, thanks for coming.

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