The Royal Bank of Scotland (RBS) is continuing to reduce its stake in US bank Citizens.
In an announcement, the UK state-owned bank announced that it would be selling shares worth up to $3.3 billion (£2.2 billion), meaning that it will own less than half of Citizens once the transaction is completed. The shift is designed to allow RBS to concentrate of its main UK retail business and cut back on its operations abroad.
The news sparked a surge in Citizens' share price closing at $24.80 on Friday (March 20th). It meant that since its start of trading in September the US bank has seen its stock rise by 15 per cent. It was a different story for RBS, however, as it saw its share price fall by 0.45 per cent as of 09:44 GMT on Tuesday (March 24th).
This latest move is part of RBS' long-term strategy to return to profit. It has previously outlined its intentions to pull out of 25 countries, lowering the number of which it operates in to just 13. This is expected to result in wholesale job losses, with the majority coming from outside its UK operations.
Announcing its latest trading update in February, Ross McEwan, RBS chief executive, commented: "The days when global domination mattered more to RBS than great customer service are well and truly over
"RBS will be stronger, it will be simpler and it will be much more focused on the UK large corporates and the western European corporates and our big financial institutions."
History with Citizens
RBS originally purchased Citizens in 1988 in a deal worth $440 million. Under its stewardship the US bank became one of the biggest regional banks in the country but following the UK government bailout in 2008, RBS has needed to scale back its operations.