In the chaos that followed the March 2023 banking crisis, as First Republic Bank teetered and Silicon Valley Bank lay in ruins, Citizens Financial Group's CEO Bruce Van Saun made a calculated bet. While other regional banks were retrenching, Citizens went on a hiring spree—scooping up hundreds of relationship managers, wealth advisors, and private bankers from the fallen institutions.

Nearly three years later, that bet appears to be paying off spectacularly. Citizens' Private Bank, which barely existed before 2023, is now approaching $40 billion in assets under management and has become the centerpiece of the bank's ambitious 30% earnings growth target for 2026.

Building an Empire from the Ashes

Citizens moved quickly in the spring of 2023. Within weeks of First Republic's collapse, the Providence-based bank had hired more than 200 bankers and advisors from the failed institution, many bringing their client relationships with them. A similar wave of hiring followed from Silicon Valley Bank's diaspora.

"We recognized immediately that this was a generational opportunity," Van Saun told analysts on the bank's most recent earnings call. "These were world-class bankers who had spent years building deep relationships with high-net-worth clients. The chance to bring that talent in-house was something we couldn't pass up."

The results have exceeded even the bank's aggressive projections. The Private Bank's deposit book has swelled from $8.7 billion at the end of 2023 to $12.5 billion by September 2025, surpassing the bank's year-end target with a quarter to spare. Assets under management are now on track to hit $40 billion by mid-2026, ahead of the original $35 billion target.

The Strategic Rationale

For Citizens, the Private Bank represents more than just a new revenue stream—it's a fundamental shift in the bank's client mix and competitive positioning.

The high-net-worth clients that the Private Bank serves typically maintain deeper relationships with their primary bank. They hold larger deposit balances, which tend to be stickier during periods of stress. They're also more likely to use multiple bank products, from mortgages to trust services to investment management.

"The Private Bank client is the most valuable client in banking. They have higher lifetime value, lower attrition, and they refer other clients like themselves. It's a virtuous cycle."

— Brendan Coughlin, Head of Consumer Banking at Citizens

The numbers bear this out. Citizens reports that Private Bank clients maintain average deposit balances roughly eight times larger than typical retail customers, and they use an average of 4.2 products compared to 2.1 for the broader consumer base.

The Path to 30% Earnings Growth

Citizens has set what many analysts consider an audacious target: 30% earnings growth in 2026, with EPS rising from approximately $3.90 in 2025 to over $5.00 in the new year. The Private Bank is expected to contribute meaningfully to that expansion.

But the growth story extends beyond the Private Bank. Citizens is also benefiting from the "unwinding" of legacy interest rate hedges that squeezed the bank during the Fed's rapid rate hikes in 2023 and 2024. As those expensive swaps roll off the books in early 2026, management projects that Net Interest Margin will expand to a range of 3.15% to 3.30% by the fourth quarter—up from around 3.0% today.

The bank is also seeing continued strength in its Capital Markets business, which posted 5% fee growth in the most recent quarter, and its commercial lending portfolio, where loan growth has been tracking in the mid-single digits.

Competitive Dynamics

The aggressive build-out of the Private Bank has not gone unnoticed by competitors. JPMorgan Chase, which acquired First Republic's main assets in May 2023, has been working to retain the relationships that didn't follow bankers to rivals like Citizens.

Other regional banks are pursuing similar strategies. KeyCorp and Fifth Third have both expanded their wealth management capabilities, while newer entrants like online wealth platforms are competing for the same affluent client base.

"Everyone wants these clients," said Gerard Cassidy, bank analyst at RBC Capital Markets. "Citizens got a head start by moving so quickly in 2023, but they'll need to continue investing in technology and service to maintain their edge."

Risks and Challenges

The aggressive growth strategy is not without risks. Building a private banking franchise requires substantial upfront investment in people, technology, and infrastructure. The bank has disclosed that the Private Bank remained in "investment mode" through 2025, meaning profitability has been suppressed while the platform scales.

There's also the question of retention. The bankers that Citizens hired in 2023 came with signing bonuses and guaranteed compensation packages. As those agreements expire, some may be tempted to move again—particularly if competitors dangle attractive offers.

Finally, the 30% earnings growth target depends heavily on a benign economic environment. Citizens is betting on a "Goldilocks" scenario with the Fed Funds Rate stabilizing near 3.25% and a steepening yield curve. Any significant deviation from that outlook could pressure results.

The Path Forward

Citizens reports its fourth quarter earnings on January 21, giving investors their first detailed look at how the Private Bank performed in Q4 and its trajectory heading into 2026. Management is expected to provide updated guidance on the $40 billion AUM target and the timeline to profitability for the division.

For the broader regional banking sector, Citizens' success offers a template: that the disruption of 2023 could become the foundation for a new era of growth. Whether other regional banks can replicate that playbook remains to be seen.