Citizens Bank is on the acquisition hunt, and Mellon Bank of Pennsylvania’s retail operation is its first target, although there are other targets on the horizon, including Sovereign Bank, also of Pennsylvania.
For Rhode Island, suggests one local banker, the best fit is Mellon Bank. It would double Citizens’ size, while avoiding any sticky problems of divesting itself of some branches, as would be the case with a Sovereign purchase.
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Sovereign, suggests the banker, is not ready yet for acquisition, but is certainly on everyone’s list and once value builds a little higher it might put on its prettiest party dress in search of a suitor.
Meanwhile, Rhode Island’s own – with Scottish parentage — Citizens is about to move to the next level. What does it mean for Rhode Island and New England as a whole?
Put simply, it’s a good thing. Certainly it’s a good thing for Citizens Bank, which will move into the stratosphere now occupied by the FleetBoston Financials.
It’s a good thing for Rhode Island because while Citizens has been, pardon the pun, a good citizen here, it might get even better as the bank grows in stature and value. We suspect Citizens will keep Rhode Island its home, leaving Boston to Fleet. A larger Citizens would tend to attract even more attention from financial services companies that might consider relocation here.
More importantly it will provide yet another major national corporate home in a state that desperately needs more large corporations to have a considerable presence here. Economists suggest the lack of many significant corporate headquarters is among the primary problems for the Rhode Island economy.
Additionally, a larger Citizens will give the state and region a real competitor to Fleet on every level, and with every size business – more options for the local and regional business community. It will only serve to strengthen Citizens and Fleet, but also the smaller area banks.
We look forward to the next chapter for Citizens Bank, a financial institution that has been growing steadily through acquisitions over the years, and one that still calls Providence its American home.
