Ownership and History
Today, RBS Citizens Financial Group, Inc. has approximately 1,400 branches, over 3,500 ATMs and more than 18,000 colleagues in 12 states covering New England, the Mid-Atlantic and the Midwest.
Through acquisitions and organic growth, Citizens evolved from the fifth-largest bank in the smallest state in the U.S. into its position today as one of the 15 largest commercial banking companies in the country.
Citizens traces its origins to High Street Bank, established in 1828 in Providence. In 1871, the bank established its own savings bank, Citizens Savings Bank. The following decades became difficult for the bank, as Providence gradually lost its pre-eminence as an industrial center and seaport.
By the 1920s, prospects seemed better but the good times were short-lived. The Great Depression of the 1930s hit hard in New England where the region’s vital textile industries were already in steep decline.
Nonetheless Citizens’ history of prudent lending meant that its losses were modest compared to its rivals. By the 1940s Citizens Savings Bank had gained a controlling interest in its founder, High Street Bank, and in 1948 High Street Bank changed its name to Citizens Trust Company.
After World War II, a number of branches were opened and Greenville Trust Co acquired. Growth continued and by 1981 Citizens had 29 branches statewide. In 1980, Citizens Financial Group was formed as a holding company for the two banks and Citizens Savings Bank converted from a mutual to a federal stock basis. Work began on a new headquarters building, which opened in downtown Providence in 1990.
By the end of the 1980s, it was clear that an alliance with an international partner was needed for Citizens to remain successful. In late 1988, the company became a wholly owned subsidiary of The Royal Bank of Scotland Group.
By joining RBS, Citizens secured the strength and support of an international financial services company and gained a partner for growth. RBS hailed Citizens as the "flagship for the company’s expansion in the United States."
Since then, Citizens has grown at an unprecedented rate, with 30 acquisitions between 1988 and 2007. Five of those acquisitions stand out as strategically transformational. In 1988, Citizens acquired Fairhaven Savings Bank in Massachusetts, its first retail banking move beyond Rhode Island, one that signaled the further growth that would rapidly follow.
Others soon followed, primarily through fill-in purchases in Massachusetts and Connecticut. Some of the predecessor banks to those acquired institutions date back to the 1700s and early 1800s.
In 1996, Citizens made its first move beyond southern New England when RBS and Bank of Ireland combined their New England banking operations through the merger of Citizens and First NH Bank in New Hampshire. The business ran under the Citizens name and the Royal Bank continued to hold most of Citizens’ enlarged share capital, regaining outright ownership two years later.
Citizens’ acquisition of the Commercial Banking Group of State Street Corporation in 1999 and the 2000 acquisition of Boston-based UST Corporation and its USTrust branches in the Boston area doubled the size of Citizens’ Massachusetts operations, giving Citizens a much stronger commercial banking in presence. With more than $30 billion in assets, Citizens became New England’s second-largest bank.
In 2001, Citizens made its first retail and commercial banking move outside of New England by acquiring the regional banking business of Mellon Financial Corporation. It brought Citizens’ retail network to Pennsylvania, Delaware and New Jersey. In 2004, Citizens Financial Group completed the largest transaction in its history. The acquisition of Charter One, which operated 680 branches in nine states from its headquarters in Cleveland, Ohio, moved Citizens into New York and the Midwest. The expanded footprint, from New England into the Mid-Atlantic and the Midwest, encompasses 30 percent of the U.S. population.
Service and delivery evolution
As the acquisitions helped evolve Citizens, so did the maturation of its platform and service-delivery channels. In 1999, the bank launched a full Web-based electronic banking and bill payment service.
In the spring of 2001, Citizens reached agreement with The Stop & Shop Supermarket Co., New England’s largest grocery retailer, to include branches in all of its Rhode Island stores and most Massachusetts locations. Since that partnership began, Citizens’ in-store banking model has extended in geography and partnerships and it has become the No. 2 supermarket banker, in deposits, as the in-store segment has grown to nearly 500 branches in 12 states.
The 2004 acquisition of the credit card division of People’s Bank (now called RBS Card Services) enabled the company to compete as a serious player in the U.S. credit card market.
In short order, less than one-tenth of its chronological history, this rapid growth sealed the transformation of Citizens from a local retail bank to one of the largest commercial bank holding companies in the U.S.