Citizens Financial extends buying spree with deal for boutique JMP

Citizens Financial Group Inc updates

Citizens Financial Group has agreed to buy boutique investment bank JMP Group for $149m in its fourth acquisition of 2021, signalling an ambition to work on high-profile stock market listings.

San Francisco-based JMP’s services include capital markets advising, underwriting, equity research, and sales and trading with a focus on the healthcare, technology, financial services and real estate industries.

JMP has had junior roles on splashy initial public offerings, including the flotation of stock-trading app Robinhood and home insurance start-up Lemonade earlier this year. It also worked on the initial public offerings of ride-hailing groups Uber and Lyft in 2019.

“The acquisition further strengthens Citizens’ growing corporate finance and strategic advisory capabilities, with a focus on high growth and compelling industry sectors,” Bruce van Saun, Citizens chief executive, said on Wednesday.

The JMP transaction brings Rhode Island-based Citizens “a strong platform based in San Francisco and New York, expanding both our range of services and our national presence”, said Donald McCree, Citizens vice-chair and head of commercial banking.

The deal follows three purchases by Citizens earlier this year: of HSBC’s bank branches on the US east coast, of the community bank Investors Bancorp and of valuation consulting firm Willamette Management Associates.

Van Saun told the Financial Times after the HSBC deal that Citizens, which was spun out of Britain’s Royal Bank of Scotland in 2015, was in the market for further acquisitions.

Citizens is paying $7.50 a JMP share, a slight premium to JMP’s closing stock price on Tuesday. JMP was up 2.2 per cent at $7.45 in morning New York trading. The target bank’s share price has already almost doubled so far in 2021.

The deal for JMP by Citizens adds momentum to a long-awaited consolidation of the US’s highly fragmented banking industry, at least among banks in the middle tier of assets.

S&P Global Market Intelligence last month estimated the total value of bank mergers could exceed $63bn in 2021, which would make it the biggest year for bank deals since the 2008 financial crisis. By the end of last month, there had been 14 such deals worth more than $500m this year, the highest in more than a decade, according to S&P.

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