Citizens Financial Group Touts Transaction-Driven 2026-27 Outlook as Commercial Bank Expands
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Citizens has evolved into a more national, product-complete commercial bank through boutique M&A (including JMP) and a shift from geographic to industry-focused coverage, positioning the franchise for a more transaction-driven 2026–27.
The bank is pushing growth in private capital, leveraged finance and treasury/merchant services with an originate-to-distribute approach and execution focus, expecting narrowing bid-ask spreads and greater new-money deal activity in 2026.
Integration of former First Republic private bankers under a “One Citizens” model is boosting cross-referrals and fee opportunities while management guides for spot loan growth of 3%–5% and says credit exposure is generally prudent, though it is watching retail, healthcare reimbursement and parts of data-center lending.
Executives from Citizens Financial Group (NYSE:CFG) outlined how the bank has broadened its commercial banking franchise over the past decade and positioned the business for what they described as a more transaction-driven environment in 2026 and 2027. Speaking at a conference fireside chat, Chair of Commercial Banking Don McCree and incoming Head of Commercial Banking Ted Swimmer emphasized expansion in products, industry coverage, and geographic reach, alongside tighter integration with the firm’s private bank and wealth capabilities.
Swimmer said the commercial bank has evolved significantly since Citizens’ IPO, moving from a traditional lending-and-deposit model toward a broader platform that includes leveraged finance, syndications, bonds, and industry vertical specialization. He pointed to a series of boutique M&A acquisitions that added industry depth and advisory capabilities, naming DH Capital, Trinity, Western Reserve, Bowstring, and JMP (acquired in 2021). Swimmer said the additions helped Citizens become a “leading force” in select sectors, including gaming and digital infrastructure, and that JMP expanded reach into equity markets as well as biotech and healthcare.
Swimmer also described a shift in coverage strategy: Citizens has moved from a geographically oriented model toward an industry-focused approach, while expanding its middle-market presence into Florida, California, and New York City. He said the bank had previously been cautious about entering markets without a broader platform presence, but that hiring talent from First Republic in California and Florida, as well as building New York coverage through the Investors and HSBC branch acquisitions, gave the bank stronger footing.
Both executives highlighted the private capital ecosystem as a long-term growth opportunity. Swimmer said Citizens began investing in the private equity space around 2014–2015 and has expanded beyond traditional sponsor-backed LBO financing into a more holistic approach that includes:
McCree added that Citizens aims to be “agnostic about executions,” describing an ability to distribute underwriting across banks, CLOs, BDCs, or private credit depending on market conditions and transaction structure. He framed the bank’s leveraged finance activity as an originate-to-distribute business, noting that Citizens typically holds an average of $12 million in a leveraged buyout and is focused on distribution fees rather than relying on leveraged lending to drive net interest income.
Swimmer and McCree also stressed ongoing investment in treasury solutions. Swimmer said Citizens pushes to win treasury business alongside middle-market banking relationships and has expanded into merchant services through a non-bank offering. McCree said that in expansion markets, roughly “95%” of added clients have been full-wallet treasury services clients.
On private markets activity, Swimmer said the firm entered last year expecting 2025 to be a strong year, but that a period he referred to as “Liberation Day” created tariff-related uncertainty that slowed transactions as sellers hesitated amid unclear forecasts. He said conditions improved entering 2026, with greater consistency in earnings expectations and more willingness among buyers and sellers to engage.
Swimmer said valuations for higher-quality assets (“A, A-minus companies”) have still been finding buyers, while transaction activity was harder in the next tier down due to wider bid-ask spreads. He said that spread appears to be narrowing “relatively significantly,” with more transactions expected to occur in 2026, though he cautioned that deal processes starting now may not translate into an immediate early-year surge.
McCree said that in 2024 and 2025 capital markets activity was heavily weighted to refinancing, with limited “new money” content, but described a pivot since about December toward new-money transactions on both the corporate and private equity sides.
McCree described the integration of former First Republic private banking teams as “incredible,” saying initial concerns about overlap faded because the client bases differed, with First Republic bankers tending toward venture and smaller funds while Citizens’ legacy franchise served larger funds. He said the teams began working together after several months and that Citizens’ broader platform—capital markets, lending, M&A, and equity capabilities—created new opportunities for those private banking clients.
Both executives pointed to a “One Citizens” approach, in which commercial banking and advisory activity is connected to private banking and wealth management. McCree said the combined capabilities have helped create stronger cross-referral dynamics and that Citizens has sought to calibrate investments with revenue generation rather than get ahead of itself on expenses.
Addressing the firm’s 3%–5% spot loan growth guide, Swimmer said Citizens is seeing increased revolver utilization among middle-market companies, activity tied to acquisitions on the mid-corporate side, and rising subscription line usage as M&A picks up. He also said the bank is seeing early signs of increased CapEx-related borrowing, including slightly elevated utilization on revolvers, though he said it was difficult to attribute that specifically to one policy catalyst versus deferred investment cycles.
On direct lending competition, McCree said he could not “think of many places” where the bank has lost significant middle-market business to direct lenders, noting their presence is more pronounced in leveraged buyouts. He said Citizens has hired syndicate resources focused on providing services to private credit funds and described the economics of lending to private credit funds and financing portfolios as comparable to arranging leveraged buyouts, while potentially changing the risk profile.
On credit monitoring, McCree said Citizens has limited exposure to software, describing it as a low single-digit percentage of the portfolio. He said the bank is watching retail—particularly areas tied to the lower-end consumer—along with healthcare reimbursement shifts and certain elements of data center lending, though he said Citizens has been “prudent” in how it has structured its exposures. He added that the bank was not seeing major portfolio themes that were causing concern.
In closing comments, Swimmer said Citizens believes it has invested through a slower period so it can “step on the accelerator” as markets become more transaction-oriented. He emphasized execution as the key priority—delivering strong outcomes in bond pricing, M&A valuation, and treasury implementation—while continuing to build industry verticals, expand in targeted geographies, deepen private capital coverage, and leverage AI and process simplification initiatives discussed by the bank publicly.
Citizens Financial Group, Inc (NYSE: CFG) is a bank holding company that provides a broad range of banking and financial services to individuals, small and middle-market businesses, corporations and institutional clients. Headquartered in Providence, Rhode Island, Citizens conducts its banking operations principally through its primary banking subsidiary, Citizens Bank, and serves customers through a combination of branch locations, ATMs and digital channels. The company is publicly traded and operates under the regulatory framework applicable to U.S.
