PROVIDENCE, RI — The top exec at Rhode Island’s largest bank says he’s optimistic the United States won’t experience a deep recession in 2022 or 2023, though he warned that inflation is the “wild card” right now.
Citizens Financial Group chairman and CEO Bruce Van Saun, who has led the bank since 2013 following its spin-off from RBS, said he’s still fairly optimistic the US economy remains in good shape. He pointed to the current high levels of liquidity in various business sectors, low unemployment and a pent-up consumer demand to spend, travel and eat out.
But he also said there are some economic headwinds related to inflation that continue to challenge consumers and businesses alike – and he said it was more difficult to ascertain how these rising costs might affect the future health of the economy.
“The joker introduced was higher inflation, which is starting to take its toll on some people’s spending power,” Van Saun told 12 News in a broad interview this month. He said companies were also struggling with a tight labor market and higher costs for supplies.
“But so far it really hasn’t caused any major disruptions in the economy,” he added.
The Federal Reserve recently raised its long-term interest rates from historically low levels in an attempt to curb rising inflation. In April, the CPI rose 8.3% year-on-year, representing year-on-year growth not seen in decades.
Van Saun said that rising interest rates are likely to cause the economy to slow down a bit, but he still gave it a “less than 50/50” chance that the country will experience a recession in either 2022 or 2023.
“There could be slower growth, but probably not to the point of recession,” he said, adding that there could even be slightly negative growth — but he still doesn’t predict there will be a deep recession like the one during the year financial crisis of 2008 or the shutdowns caused by COVID-19.
“We’ll see if they’re able to pull off a soft landing or a very shallow recession, but they’re stepping on the brakes and applying the medicine we need now to get inflation back under control and hopefully she’ll turn out OK,” he said of federal regulators.
Van Saun, who has helmed the bank throughout its history as a public financial institution, has recently overseen an expansion into the New York City area following a number of key acquisitions. The expansion gave the bank its first foothold in this part of the Northeast, bridging a gap between New England and what was then the Philadelphia-New Jersey area.
“There was this gap,” Van Saun said, adding that he believes there is still room to improve the banking industry in New York City, even though it’s a “competitive market.”
“We see some opportunities to do well and be successful over time,” he said.
In addition to helping the bank grow its overall presence across the region, Van Saun was also responsible for overseeing Citizens’ physical growth on the ground. According to Providence Business News, Citizens is the largest Rhode Island-based bank by assets, followed by The Washington Trust Co.
According to the Federal Deposit Insurance Co., Citizens also has the largest market share of deposits within Rhode Island, totaling about $15 billion, or 37%. The bank’s local growth included the construction of a huge warehouse in Johnston, where it consolidated its corporate operations.
Van Saun said the project, along with the changing dynamics of the fintech sector, has allowed them to adapt with the times and hire about 400 technology jobs in-house rather than outsource them.
Looking ahead, Van Saun said the bank will remain committed to calling Rhode Island home. And he hopes Citizens will continue to grow and become one of the best-performing banks in the country. Van Saun has no plans to continue for now.
“I’m having a great time and I think we’ve built a great team,” he said. “I’m here and I have nothing else to do for now.”
Ted Nesi ([email protected]) is an investigative reporter for Target 12 and the Politics and Economics Editor at 12 News. He co-hosts Newsmakers and writes Nesi’s Notes on Saturdays. Connect with him on Twitter and Facebook
Eli Sherman ([email protected]) is a Target 12 investigative reporter for 12 News. Connect with him on Twitter and on Facebook.
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