Royal Bank of Scotland to speed sale of U.S. banks

Royal Bank of Scotland, bailed out by the British government in 2008, says it plans a "partial initial public offering" of Citizens Financial, then full divestiture by the end of 2016.
Royal Bank of Scotland, bailed out by the British government in 2008, says it plans a "partial initial public offering" of Citizens Financial, then full divestiture by the end of 2016. (Bloomberg)
Posted: November 03, 2013

The Royal Bank of Scotland (RBS), which was bailed out and is still owned mostly by British taxpayers, said Friday it would "accelerate" the sale of its U.S. banking subsidiary, which includes Citizens Bank of Pennsylvania.

Citizens has 159 branches in Philadelphia and its four suburban Pennsylvania counties, more than any other bank in the region.

RBS said in a statement that it was planning a "partial initial public offering" of Citizens Financial Group for 2014 and "intends to fully divest the business by the end of 2016."

The change in pace is attributed to the British government's concern that RBS was moving too slowly to relieve taxpayers of the burden they assumed when the government paid $72.3 billion to prop up the bank during the financial crisis of 2008, the largest bank bailout in history.

Citizens Financial Group is headquartered in Providence, R.I. It operates as Charter One in the Midwest and Citizens Bank in the Northeast. Overall, it has about 1,400 branches and 19,000 employees in the United States. Some of the Philadelphia-area branches were previously owned by the former Girard and PSFS banks.

In 2003, Citizens Bank agreed to pay $57.5 million over 25 years ($2.3 million per year) to put its name on the Phillies' then-new stadium and pay $37.5 more for advertising on the team's radio and TV broadcasts.

A Phillies spokeswoman would not say whether the terms of the deal had changed or whether the team had begun to look for a new naming rights deal.

On Friday, RBS reported a third-quarter net loss of $1.32 billion and predicted a substantial loss for 2013.

RBS said that it transferred $61 billion worth of its worst loans to an internal "bad bank" and that those loans would be managed separately.

The British government would like to sell its approximately 81 percent stake in the bank. "RBS will deal decisively with the problems of the past by separating out the good from the bad," Chancellor of the Exchequer George Osborne said in a statement, according to Bloomberg News. "It means less exposure for the British taxpayer."


JoeD@phillynews.com

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