Citizens Financial Group Forecasts Transaction-Driven Growth in 2026
Citizens Financial Group (NYSE: CFG) executives recently highlighted the bank’s strategic expansion and positioning for a more active transaction environment anticipated in 2026 and 2027. During a recent conference fireside chat, Don McCree, Chair of Commercial Banking, and Ted Swimmer, incoming Head of Commercial Banking, detailed a decade-long effort to broaden the bank’s commercial banking footprint. This includes significant investments in product offerings, expanded industry coverage, and a wider geographic reach, all while strengthening integration with the firm’s private bank and wealth management divisions.
The bank’s evolution has moved beyond a traditional lending and deposit model, incorporating leveraged finance, syndications, bonds, and specialized industry verticals. This transformation was fueled by a series of strategic acquisitions of boutique firms, including DH Capital, Trinity, Western Reserve, Bowstring, and JMP (acquired in 2021). These additions have enabled Citizens to establish a leading presence in sectors like gaming and digital infrastructure, with JMP further extending reach into equity markets, biotech, and healthcare.
Strategic Shift to Industry-Focused Coverage and Geographic Expansion
Citizens has undergone a notable shift in its coverage strategy, transitioning from a geographically-oriented approach to one centered on specific industries. This change is coupled with an expansion of its middle-market presence into key markets like Florida, California, and New York City. Previously hesitant to enter markets without a robust platform, the bank bolstered its position by recruiting talent from First Republic in California and Florida, and through acquisitions of Investors and HSBC branches to establish a stronger presence in New York.
The bank’s foray into private capital began around 2014-2015, initially focusing on sponsor-backed leveraged buyout (LBO) financing. However, Citizens has since broadened its scope to encompass a more comprehensive approach, including subscription lines, lending to direct lending funds, business development companies (BDCs), and bond and equity capabilities – further enhanced by the JMP acquisition.
Leveraged Finance Strategy: Originate-to-Distribute Model
Don McCree emphasized Citizens’ commitment to being “agnostic about executions,” meaning the bank’s ability to distribute underwriting across various avenues, including banks, collateralized loan obligations (CLOs), BDCs, or private credit, based on prevailing market conditions and transaction structures. The bank operates on an originate-to-distribute model within leveraged finance, typically holding an average of $12 million in leveraged buyouts. The focus is on generating distribution fees rather than relying on leveraged lending to drive net interest income.
Furthermore, the bank has observed that approximately 95% of new clients in expansion markets utilize full-wallet treasury services, highlighting the success of its broader financial solutions approach.
Navigating Market Uncertainty and Anticipating 2026 Activity
While initially anticipating a strong 2025 for private markets, Ted Swimmer noted that “Liberation Day” and subsequent tariff-related uncertainties created hesitancy among sellers, slowing down transaction activity. However, conditions have improved entering 2026, with more consistent earnings expectations and increased willingness among buyers and sellers to engage.
Swimmer indicated that valuations for higher-quality assets are still attracting buyers, although transaction activity has been more challenging for companies in the next tier. He anticipates a narrowing of bid-ask spreads and a rise in transactions throughout 2026, although cautioned that deals currently in progress may not immediately translate into a surge in early-year activity. A notable shift has occurred since December, with a move towards new-money transactions on both the corporate and private equity sides, contrasting with the 2024 and 2025 period dominated by refinancing activities.
Private Bank Integration and a “One Citizens” Approach
The integration of former First Republic private banking teams has been described as “incredible,” with initial concerns about overlap proving unfounded due to differing client bases. First Republic bankers primarily served venture and smaller funds, while Citizens’ legacy franchise catered to larger funds. The combined capabilities have fostered stronger cross-referral dynamics and enabled Citizens to calibrate investments strategically, prioritizing revenue generation over excessive expense growth. The firm is operating under a “One Citizens” philosophy, connecting commercial banking and advisory services with private banking and wealth management.
Citizens Financial Group, Inc. (NYSE: CFG) provides a wide array of banking and financial services to individuals, small and middle-market businesses, corporations, and institutional clients. Headquartered in Providence, Rhode Island, the company operates through its primary banking subsidiary, Citizens Bank, serving customers through branches, ATMs, and digital channels.
