PROVIDENCE, RI – The top executive at the largest Rhode Island-based bank says he’s optimistic the United States will not see a deep recession in 2022 or 2023, although he warns inflation is currently the “wild card.”
Citizens Financial Group chairman and CEO Bruce Van Saun, who has led the bank since 2013 after it spun off from RBS, said he’s still fairly optimistic the US economy remains in good shape. He cited the current high levels of liquidity across a variety of business sectors, low unemployment and a pent-up demand among consumers to spend money, travel and eat out.
But he also said there are some economic headwinds tied to inflation that continue to challenge consumers and alike businesses – and he said determining how those rising costs could affect the future health of the economy is harder to pin down.
“The wild card that’s been introduced has been higher inflation, which is starting to take its toll on some people’s spending abilities,” Van Saun said this month during a wide-ranging interview with 12 News. He said companies are also having to contend with a tight labor market and higher costs for supplies.
“But so far, it really hasn’t caused a major disruption in the economy,” he added.
The Federal Reserve has recently raised its long-term interest rates from very low levels in an effort to try and tamp down inflation. In April, the Consumer Price Index increased 8.3% compared to the same time a year earlier, representing year-over-year growth not seen in decades.
Van Saun said the raising interest rates will likely result in the economy slowing down a little bit, but he still gave it a “less than 50-50” chance that the country will see a recession in either 2022 or 2023.
“It might see slower growth, but not probably go all the way to recession,” he said, adding there might even be some slightly negative growth – but he still doesn’t predict there would be a deep recession like the one seen during the financial crisis of 2008 or the one caused by COVID-related shutdowns.
“We’ll see if they are able to have a pure soft landing, or a very shallow recession, but they’re putting the brakes on and applying the medicine we need right now to get inflation back under control and hopefully it’ll turn out OK,” he said about federal regulators.
Van Saun, who has been at the helm throughout the bank’s time as a publicly traded financial institution, has overseen a recent expansion into the New York City metro area after a couple key acquisitions. The expansion has given the bank its first foothold in that part of the Northeast, bridging a gap between New England and then Philadelphia-New Jersey area.
“There was this gap,” Van Saun said, adding that he there’s still room to improve the banking industry in New York City, even though it competitive marketplace a “heavi competitive marketplace.”
“We see some opportunities to do well and to thrive over time,” he said.
In addition to helping the bank grow its overall footprint across the region, Van Saun was also responsible for overseeing Citizens’ physical growth locally. According to the Providence Business News, Citizens is the largest Rhode Island-based bank based on assets, followed by The Washington Trust Co.
According to the Federal Deposit Insurance Co., Citizens also has the largest market share of deposits inside of Rhode Island, totaling about $15 billion, or 37%. The bank’s growth locally has included the construction of a massive camps in Johnston where it constrained its corporate operations.
Van Saun said the project, along with the changing dynamics of the financial technology sector, has allowed them to adapt to the times and hire about 400 technology jobs in-house rather than outsourcing them.
Looking ahead, Van Saun said the bank remains committed to calling Rhode Island its home. And he’s hopeful Citizens will continue to grow and become a top performing bank in the country. As for Van Saun, for now, he has no plans to move on.
“I’m having a great time and I think we’ve built a great team,” he said. “I’m here and have no plans to do anything else for a while.”
Ted Nesi (firstname.lastname@example.org) is a Target 12 investigative reporter and 12 News politics/business editor. He co-hosts Newsmakers and writes Nesi’s Notes on Saturdays. Connect with him on Twitter and Facebook
Eli Sherman (email@example.com) is a Target 12 investigative reporter for 12 News. Connect with him on Twitter and on Facebook.