Citizens Financial Group Inc., the Providence, R.I.-based subsidiary of Royal Bank of Scotland PLC, reported earnings of $13.2 million for the quarter ended March 31, a 67% increase from the previous year.

Citizens, which begins its fiscal year in October, also reported a 36% profit increase for its first six months, to $34.1 million. The bank had assets of $10.2 billion at March 31, up 51% from last year's second fiscal quarter.

The impressive jump in profits partially reflected the completion of several New England acquisitions during the last 12 months. Citizens bought Neworld Bancorp, Boston; Coastal Federal Savings Bank, New London, Conn.; Old Stone Savings Bank, Providence; and Quincy Savings Bank, Quincy, Mass.

As a result, deposits also surged 48%, to $8.7 billion.

"This has been a period of exceptional growth for Citizens," said Lawrence K. Fish, chairman, president, and CEO. "We've hit our three-year target of $10 billion in assets in two years, continued to build revenues with our focus on community banking, and all the while controlled expenses, especially those associated with our acquisitions and an expanding loan portfolio."

Although Citizens reported a 7-basis-point improvement in its efficiency ratio, or ratio of expenses to revenues, to 68.35%, the number is still substantially worse than at many of its peers.

James Dorsey, director of corporate affairs at Citizens, credited gains in the bank's retail business for a 52% boost in net interest income, to $92.5 million. "But we will see that shrinking going forward because of rising interest rates," he said.

"Loan growth is up, but slow," he added. Asset growth on the loan side and improvements in fee income came from acquisitions, Mr. Dorsey said.

Citizens contributed 18% of Royal Bank of Scotland's earnings for its fiscal year's first six months.

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