Can CFG's Efficiency Initiatives Deliver $450M+ in Benefits by 2028?

Citizens Financial Group, Inc. CFG is advancing its multi-year Reimagine the Bank program to simplify operations, improve productivity and enhance the customer experience. Management expects the initiative to generate about $100 million of annualized pre-tax benefits by year-end 2026, more than $200 million by 2027 and more than $450 million by 2028.

Launched in July 2025, Reimagine the Bank combines cost efficiency with technology-led transformation. CFG is using artificial intelligence (AI) to improve customer service, automate workflows and streamline operations, while technology modernization, vendor negotiations and property optimization are expected to reduce costs further.

Branch optimization further complements CFG’s efficiency efforts. Its branch strategy builds on the 2022 acquisitions of HSBC’s East Coast branches and Investors Bancorp, which expanded its presence in key markets and added more than 200 branches.

Through its Network Evolution and Xperience Transformation (NEXT) initiative, CFG is further optimizing its footprint while strengthening advisory, wealth and small-business capabilities. After reducing its retail branches from 1,180 in 2015 to 970 in 2025, the company plans to exit 100-120 in-store branches while adding 50-60 nearby traditional branches. The strategy aims to deepen customer relationships, increase deposits and fee income, while maintaining a stable branch count through 2035. These efforts are expected to improve profitability and support CFG’s target of achieving a 16%-18% return on tangible common equity (ROTCE) by 2027.

The Private Bank adds another growth lever. The franchise generated more than 25% of return on equity in the second quarter of 2026, supported by continued customer growth. CFG added one private banking office during the quarter and expects five additional openings by 2027. Expansion in New York Metro, Florida and California is helping the company deepen relationships with high-net-worth clients and capture additional revenue opportunities. The expansion is expected to improve the profitability of CFG’s overall business mix, complementing the cost savings generated by Reimagine the Bank.

Overall, Reimagine the Bank, branch optimization and Private Bank expansion provide CFG with multiple avenues to improve efficiency, drive revenue growth and strengthen profitability. With annualized benefits expected to increase from about $100 million in 2026 to more than $450 million by 2028, continued execution across these initiatives will be key to achieving the target.

How Other Financial Firms Are Improving Efficiency?

Similar to CFG, other financial firms like Wells Fargo WFC and Huntington Bancshares HBAN are also focusing on expense management and operational efficiency to improve profitability.

Since the third quarter of 2020, Wells Fargo has pursued cost-cutting measures through organizational streamlining, branch optimization and workforce reductions. The removal of the Fed’s asset cap in June 2025 has also provided greater flexibility for growth. Wells Fargo generated a 17.7% ROTCE in the second quarter and targets a sustainable medium-term ROTCE of 17%-18%.

Similarly, Huntington Bancsharesis using acquisition synergies and expense discipline to improve operating efficiency. It expects $435 million of annual cost synergies by 2027 and more than $300 million of revenue synergies by 2028 from its Veritex Holdings and Cadence Bank acquisitions. Huntington Bancshares’ ROTCE rose to 15.1% in the second quarter of 2026 from 11.6% in the first quarter, supporting its 18%-19% ROTCE target for 2027.

CFG’s Price Performance & Zacks Rank

Citizens Financial’s shares have risen 10.7% in the past six months compared with the industry’s growth of 11.8%.

Image Source: Zacks Investment Research

Currently, CFG carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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