Citizens Financial Group Inc. CEO Bruce Van Saun said the bank's digital offering has raised $800 million of deposits in less than two months. Separately, the executive also said the bank continues to pursue an aggressive growth strategy despite late-cycle concerns.
He said that 80% of the deposits have come from outside the bank's footprint and that only 3% of the deposits are from existing Citizens customers. The bank launched its digital offering July 10 and all numbers were as of the end of August.
"When we compare the cost of the direct bank deposits coming in to our high-cost promo sources of deposits, it is cost-effective for us to do that," Van Saun said Sept. 12 during Barclays Global Financial Services Conference.
Asked about the company's weak stock performance relative to its peers, Van Saun said the bank has outperformed its peers since its initial public offering in 2014. But he did acknowledge that the stock has lagged this year, an "enigma" given that the bank's strong earnings are increasing analyst estimates. Van Saun said the weak stock performance was likely due to the market being excessively focused on net interest margin and deposit costs, but he said the bank could not adopt a defensive strategy similar to some of its peers, which have focused on reducing expenses and increasing capital returns.
"We're not at a point in terms of the maturity of the bank that that would be a winning strategy for us. There are still things that we need to build," Van Saun said, adding that he was not concerned about credit quality.
"I think time will tell whether we tried to grow too hard into late-cycle. I don't think that that's the case," he said. "I think the places that we're going for loan growth are prudent. I think our stressed losses demonstrate that."