Royal Bank of Scotland to raise £1.8bn from Citizens Financial Group sale
City Index September 24, 2014 3:15 PM
<p>Royal Bank of Scotland is selling a 25 per cent stake in US bank Citizens Financial Group.</p>
Royal Bank of Scotland (RBS) is aiming to raise $3 billion (£1.8 billion) from selling a stake in US bank Citizens Financial Group.
The bank has priced shares at $21.50 as it puts its 25 per cent stake up for sale but it represents a drop in initial forecasts which put shares between $23 and $25. It had previously aimed to generate $3.5 billion from the sale but this has since been revised. RBS purchased Citizens for $440 million in 1988 but since its 2008 bailout it has been pressured to sell its foreign holdings.
Under the stewardship of RBS, Citizens became one of the biggest regional banks in the US but this announcement highlights the British bank's decision to reduce its influence on its overseas purchase. It stated that it aims to sell its entire stake in Citizens by 2016.
When floated on the New York Stock Exchange later today (September 24th), Citizens is expected to have a market value of around $12 billion.
Ross McEwan, RBS chief executive, said: "The sale of Citizens is an integral part of the RBS capital plan.
"This IPO [initial public offering] represents a key step on the path to full divestment. Selling Citizens will significantly improve our capital position and help us to create a strong and secure bank that can continue to fully support the needs of its customers.”
RBS was at the heart of the vote over Scottish independence earlier in the month. In the run-up to the referendum on whether or not Scotland should break away from the UK and become an independent nation, RBS announced that it would relocate its registered headquarters to London if Scotland voted 'Yes'.
The bank stated that it had no intention to move operations or jobs but said it would be "necessary to re-domicile the bank's holding company". Scottish voters opted to stay in the union with 55 per cent voting 'No'.
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