Citizens plans to close between 100 and 120 supermarket-based locations and, instead, opt to launch 50 to 60 stand-alone branches nearby, with a greater emphasis on advice, private banking, wealth and serving small businesses, the bank said Thursday in a second-quarter earnings presentation.
“This type of careful investment in physical locations and in people, if executed well, should create a nice lift in the deposit trajectory without taking on the risk and significant capital expenditure of opening a whole bunch of de novos outside of the footprint,” Citizens CEO Bruce Van Saun said Thursday on a conference call.
That reinforces a strategy other top Citizens executives have espoused in recent months.
“The 14 states we operate in today offer more than enough opportunity when it comes to the consumer bank,” Matt Boss, head of Citizens’ consumer bank, told Banking Dive in May.
It stands in contrast to other regional banks such as Huntington and Fifth Third – both Ohio-based banks that stretched their respective footprints by acquiring Texas-headquartered lenders last year.
As early as April 2025, Nuno Dos Santos, Citizens’ head of branch distribution, spotlighted the bank’s “aggressive” position on reinvesting in a transformation of its existing locations.
Once close to 7,000 square feet, Citizens’ new or renovated branches encompass about 2,000 to 3,000 square feet, with far less emphasis on transactions and more on space for banker conversations with clients.
Citizens President Brendan Coughlin spoke to Banking Dive in March, noting that – particularly in New England, “we’re going to do a lot of surgery around some of our legacy markets.”
That meant gearing the bank toward mass-affluent customers and above, and making branches “more impressive, [on] the right corner, [with] the right staffing.”
Citizens is hardly the first bank to aim for the mass-affluent segment. Truist and Regions, for example, have embarked on the same pivot.
Nor is Citizens the first to dispatch with in-store branches. When Huntington acquired TCF in 2021, it closed nearly 100 Michigan-based branches couched inside Meijer grocery stores. Similarly, People’s United closed 140 branches located inside various Stop & Shops, just ahead of the Connecticut bank’s acquisition by M&T. U.S. Bank and PNC have also made similar moves with grocery store branches.
Citizens projects the branch retooling won’t impact the bank’s goal to reach 16% to 18% return on tangible common equity by the end of 2027.
In its second-quarter earnings statement, also delivered Thursday, Citizens reported 13.9% ROTCE, up from 12.2% three months earlier.
Meanwhile, the bank’s profit jumped 35% year over year, in the second quarter, to $587 million. And revenue rose 12% year over year to $2.3 billion, Citizens reported Thursday.
Facts Only
* Citizens plans to close 100 to 120 supermarket-based locations.
* Citizens plans to launch 50 to 60 stand-alone branches.
* The new branches will emphasize advice, private banking, wealth management, and serving small businesses.
* Citizens CEO Bruce Van Saun stated that careful investment in locations and people should create a lift in the deposit trajectory without taking on risk from opening many new locations.
* Matt Boss, head of Citizens’ consumer bank, noted that the 14 states offer more than enough opportunity for consumer banking.
* Huntington and Fifth Third expanded footprints by acquiring Texas-based lenders.
* Citizens' branch retooling reduced the size of branches from close to 7,000 square feet to about 2,000 to 3,000 square feet.
* Citizens projects this branch retooling will not impact the goal to reach 16% to 18% return on tangible common equity by the end of 2027.
* In the second quarter, Citizens reported 13.9% ROTCE, up from 12.2% three months prior.
* Citizens reported Q2 profit of $587 million and revenue of $2.3 billion year over year.
Executive Summary
Full Take
The operational shift details a calculated maneuver to pivot the business model toward higher-margin advisory services while managing real estate risk. The move away from high-volume, low-margin transaction centers (supermarket locations) toward relationship-focused branch spaces reflects an attempt to generate disproportionate returns from client engagement rather than sheer transactional throughput. This strategy is echoed by competitors who have utilized acquisition strategies to expand their regional presence, suggesting a recognized pattern in the regional banking landscape where footprint expansion often involves strategic absorption rather than Greenfield development.
The contrast between Citizens' measured approach and other regional banks suggests a tension between operational agility and aggressive market capture. The emphasis on "surgery around legacy markets" in New England indicates an understanding that density of high-value clientele can be effectively served by optimizing existing assets, rather than committing to the full capital expense required for large-scale branch openings, as noted by the CEO. This places the bank in a position where performance metrics (like ROTCE targets) must align with qualitative shifts in customer service delivery. The implication is that success will hinge not just on real estate optimization but on effectively converting physical space into high-value advisory time, making the efficacy of this transformation and the subsequent deposit trajectory the critical unknown variables.
Bridge Questions: If the emphasis remains on relationship banking, how does the bank measure the marginal profitability of a square foot dedicated to private banking versus one dedicated to transactional service? What specific metrics are being employed internally to ensure that the projected lift in deposits is achieved without sacrificing the quality or breadth of service for the expanded small business and mass-affluent segments? What is the long-term risk profile associated with relying on an optimized existing footprint versus future, less controlled growth?
Sentinel — Human
The text reads like standard financial journalism, successfully weaving corporate strategy with comparative industry actions based on reported earnings data.