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New England's New Largest Bank Grows

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Latest Citizens purchase will lift state, CEO says

The planned acquisition of Charter One Financial Inc., of Cleveland, will mean more jobs and more clout for Rhode Island, Lawrence K. Fish says.

BY DAVID McPHERSON

Journal Staff Writer -Thursday, May 6, 2004

PROVIDENCE -- Power, prestige and jobs.

All should flow to Providence and the rest of Rhode Island as Citizens Financial Group Inc. joins the ranks of the nation's very largest banks, company chairman and chief executive officer Lawrence K. Fish said yesterday.

"The prestige and the power that will bring to this community is very exciting, and it's so gratifying for all of us at Citizens, that through all of our growth and our success, we've been able to keep Providence as our home," Fish said.

The day after announcing a deal that will transform Citizens, Fish stated without hesitation that the $10.5-billion purchase of Charter One Financial Inc., of Cleveland, will mean more jobs for Rhode Island.

"Over time, there's no question jobs will be growing here," Fish said, in an interview in his 12th-floor office with its sweeping view of the city.

He said he had no handle yet on how many jobs would be created here, but indicated that more jobs are inevitable.

"Clearly, the jobs go to where the company is headquartered," Fish said, fresh from a news conference called to discuss the deal at the company's headquarters adjacent to Waterplace Park.

He noted that major departments now overseeing operations in seven states are based in Providence, including human resources, auditing, finance, accounting and risk management.

"Of course, those operations will get bigger with a larger balance sheet and more employees," said Fish.

He pointed to one local employee as an example of those who benefit from Citizens' continued growth.

Cindy Zambic, who sent an e-mail to Fish congratulating him on the deal, started with Citizens in 1993 as one of three people working on payroll.

"She was a clerk," Fish said. "Today, she's a vice president in human resources, and yesterday afternoon her job got even bigger."

CITIZENS IS OWNED by the Royal Bank of Scotland Group, which is based in Edinburgh, Scotland. With the Royal's growth at home constrained by U.K. regulatory restrictions, Fish operates with a mandate to grow the Citizens franchise.

Until the agreement to buy Charter One and move into the Midwest, Citizens' largest deal had been the 2001 acquisition of 345 bank branches in Pennsylvania, Delaware and New Jersey from Mellon Financial Corp.

That deal resulted in more than 500 new jobs in Rhode Island as Citizens expanded existing operations centers and opened new ones. The opening of new supermarket branches also has added to Citizens' job growth in Rhode Island.

At the news conference, Fish noted that back in 1992, Citizens employed about 1,000 people in Rhode Island. Today, the number is 5,000.

Company-wide, Citizens employed about 2,000 workers in 1992. The Charter One acquisition will raise the total to more than 24,000.

Mayor David N. Cicilline called the Citizens purchase of Charter One "exceptionally good news" for Providence and the state.

"It's the growth of one of our most important companies," said Cicilline, who attended the news conference along with Governor Carcieri and Lt. Gov. Charles J. Fogarty.

Fish said there will be some job cuts as Charter One operations are consolidated into Citizens. He did not provide an exact number, but said it would be in the hundreds, not the thousands. While the Charter One purchase may be good news for Providence, it is bad news for Cleveland, where many of the cuts are likely to occur.

The Royal Bank of Scotland pitched the deal to U.K. investors with a promise to cut Charter One's costs by $185 million, or 23 percent.

With little, if any, overlap in the Citizens and Charter One markets, no bank branches are expected to close because of the deal.

The acquisition will bring Citizens to six new states -- Ohio, Michigan, Illinois, Indiana, New York and Vermont. In total, Citizens will operate in 13 states after the deal is concluded. That is expected to occur in the fourth quarter of this year.

With $128.8 billion in assets, the new Citizens will rank among the 10 largest commercial bank holding companies in the United States.

That will put it near where FleetBoston Financial Corp. ranked before its recent sale to Bank of America Corp., of North Carolina.

Fish lives in Chestnut Hill, Mass., but he vowed to keep Citizens' headquarters in Providence as a reminder of its roots, which trace back to the old High Street Bank opened in Hoyle Square in 1828.

"I believe Rhode Island helps us remember who we are, and I believe that's very good for the company," Fish said.

From The Providence Journal

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