Citizens Bank CEO: Worker shortages holding back businessesBy MICHAEL COUSINEAU
New Hampshire Union Leader
April 20. 2018 8:19PM
MANCHESTER — Citizens Bank has grown its commercial loan portfolio in New Hampshire by about 5 percent in the past 18 months, its CEO said Friday, but companies are being hurt by worker shortages.
“One of the things we hear from our customers is that what holds them back from growing even more and even faster is the inability to fill positions with the talent that they need,” Bruce Van Saun said in a phone interview from Stamford, Conn.
The state’s unemployment rate stood at 2.6 percent in March.
“If borrowers can’t put ideas into motion and jobs aren’t getting created, they’re not going to borrow money to implement it,” state Banking Commissioner Jerry Little said in a separate interview.
Citizens ranked first in New Hampshire in total deposits, with nearly $7.7 billion or 23.22 percent market share as of June 30, 2017, according to the Federal Deposit Insurance Corp. TD Bank was second with 21.56 percent.
“We don’t want to just be playing defense and trying to defend a significant market share,” Van Saun said. “Let’s figure out how we can continue to grow our business and take business away from some of our smaller rivals.”
Citizens Financial Group on Friday reported first-quarter net income was $388 million, up 21 percent from $320 million in first-quarter 2017.
“A nice result and I think more importantly we’ve indicated Q2 is setting up to be a very strong quarter for us,” Van Saun said.
He also weighed in on federal regulators fining Wells Fargo $1 billion for abuses in its auto and mortgage business, including the bank admitting it opened up millions of accounts customers didn’t want.
“Wells was unique in terms of the sales culture that they kind of created throughout the company, and I give them credit for at least having tried to turn over all the rocks to get to the bottom of what was the extent of it,” Van Saun said.
“I think that regulators want to send a very stern message to all banks that if you fall off the right track and you engage in behavior like this and your culture morphs into something like this, it’s going to be dealt with very severely,” he said.
Forecasted higher interest rates should help the bank’s bottom line, he said.
“We actually benefit as rates go up because our loans reprice faster than our deposits reprice,” he said.
Citizens likes a gradual pace in rates rising, he said, “because it also gives borrowers an ability to adjust to the higher payments, and so the downside of the rates going up too fast is then you create some credit issues, and so I think the Fed’s been very deft in terms of sticking to a gradual and well telegraphed pace, and it gives borrowers plenty of lead time to make sure they’re prepared.”