Citizens Financial Group intends to double its number of home loan officers and has named a new treasury services head as part of its efforts to catch up with regional rivals, Chief Executive Bruce Van Saun said after the bank's initial public offering Wednesday.
The Providence, R.I., bank, which made its first step of independence away from parent Royal Bank of Scotland by selling 25% of its shares to the public, will hire 350 mortgage officers as part of its immediate plan to double returns over two years.
"We will not have sexy new products, just more people out there," Van Saun said in a telephone interview Wednesday afternoon.
Citizens has hired Michael Cummins as an executive vice president and head of the bank's treasury solutions unit, according to a bank spokesman. Cummins, who is scheduled to start in October, most recently led North American payments and cash management for HSBC; he previously worked at JPMorgan Chase. He succeeds James Gifas, who is no longer with Citizens, the spokesman said.
Citizens will make plays in two consumer markets already crowded with competition, too: auto and private student loans, bank officials have said. It will, for example, beginning in October consolidate and refinance both federal and private student loans, an area dominated by Sallie Mae.
Citizens will also move down the credit spectrum from "super prime" to prime car borrowers, Van Saun said. He did not detail how what FICO range the bank will target. Citizens makes at present car loans in 43 states.
Banks have seen auto margins come under attack in the face of sharp competition from specialty finance companies, executives including TD Bank's Tim Hockey said at investor conferences this month.
The Citizens IPO, at $3 billion, is the second-largest IPO in 2014, following Alibaba Group Holding's $25 billion debut just last week. Investors were lukewarm to Citizens' offering, forcing shares down to $21.50 per share from a marketed range of $23-$25, as marketers suggested. The stock closed at $23.08 in the first day of trading.
"Citizens could be described as a 'big ugly', a term some institutional investors use to describe large-cap banks that have uninspiring returns and little growth," said Jeff Davis, managing director at Mercer Capital, ahead of the offering.
Citizens was the ninth bank IPO of the year, compared with only four in 2013 and four in 2012. A stronger outlook for earnings growth is largely attributed for the uptick in activity and may lead to additional banks deciding to go public, analysts agree.
Morgan Stanley, Goldman Sachs and JPMorgan managed the deal.
RBS is expected to fully divest Citizens by 2016.