By handing out bonuses of up to $750 to many of its rank-and-file employees last week, Citizens Financial Group has taken an unusual step in an industry known for its tightfistedness.
"It certainly engenders a lot of good will, but I'd be real surprised if you see a lot more of this in banking," said Lawrence W. Cohen, an analyst at PaineWebber.
While banks often give individual employees bonuses tied to specific business objectives, it's highly uncommon to simply hand out checks to employees who have more than a year of service. At Citizens, 2,700 such employees below the vice president level received checks last week ranging between $250 and $750.
Chief executive Lawrence K. Fish said he wanted to reward workers who have participated in the Providence, R.I.-based bank's rapid asset growth.
Helped by mergers, Citizens has grown over the past four years from a 60-branch bank with $4.4 billion in assets to a 220-branch institution with more than $14 billion in assets.
Last week, the bank, a subsidiary of the Royal Bank of Scotland, also reported net income of $53 million for its fiscal second quarter, four times the net income of a year earlier. Almost $30 million of that income came from one-time gains, however.
Mr. Fish, who received a $1.5 million earnings-related bonus last year, said this year's rank-and-file bonuses cost the bank about $2 million.