Citizens Financial Group is restructuring its sports finance operations to shift the business oversight to the bank’s regional hubs and away from national management.
The bank, which has an extensive retail banking operation in addition to large corporate finance arms, has elected to move responsibilities for sports finance work to its regional hubs, according to people familiar with the moves who asked not to be named, because they aren’t authorized to speak on behalf of the publicly traded organization. The people said the restructuring is a return to a previous model Citizens had used for sports finance. Essentially, bankers in Philadelphia would manage the sports relationships in that region, for example. The sports finance division has relationships with the five major pro leagues in North America and has worked on deals with the Colorado Avalanche, LAFC and leading the financing for SoFi Stadium.
“Citizens offers best-in-class solutions and advice as a strategic partner to clients in our established sports finance division. We serve clients across the country under our regional corporate banking model,” Citizens’ head of commercial and corporate banking communications Frank Quaratiello said in an email.
The shift appears to mean at least some of the positions overseeing sports finance on a national level have been eliminated. New York-based managing director Jon Farley left the business in November and is seeking employment in financial services, according to his LinkedIn profile. The executive didn’t return requests for comment. Citizens’ Chicago-based sports finance director Ray Gobran declined to comment, deferring to the bank’s communications division.
Citizens has been undergoing a broader reorganization of its commercial and corporate banking structure. In the last quarter, the Providence, R.I.—based financial services business cut 650 jobs, about 2.5% of its workforce, including exiting the auto loan and wholesale mortgage businesses. It isn’t clear if the sports finance moves are related to the broader corporate initiatives.
“We are executing on opportunities to simplify our organization and save more on third-party spend as well,” vice chair John Woods said in an earnings call with analysts in mid-January. “We have also taken a hard look at our space needs and are rationalizing some of our corporate and back-office facilities.
Citizens has been looking to become more neutrally exposed to interest rates, according to Jefferies & Co. equity analyst Ken Usdin, who wrote a note in November on a meeting with Woods to discuss the bank’s strategy. The rise in interest rates since early 2022 has hurt financial services companies, because they have made loans at lower interest rates while facing a higher cost of capital for new financings. Essentially, loans they made years ago now are underperforming to what new loans could be charging now. Citizens isn’t completely on defense: It is seeking growth in the New York and New Jersey region as well as in private banking, according to Usdin.
Citizens has some $222 billion in total assets, including about $44 billion of commercial and industrial loans, an area that houses its sports financings, according to its latest disclosed financials. It is estimated that Citizens’ sports-related portfolio is about $2 billion. The bank has made few disclosures on the performance of its sports loans in recent years. Its 2020 third quarter earnings report noted its sports team and stadium finance portfolio was strengthening with the resumption of sports after the height of the pandemic.
Moves in the sports finance division are separate from the bank’s marketing partnerships with sports, such as its sponsorship of the Phillies’ home ballpark and the New York City Marathon.