RBS cuts price of Citizens sale

Rhode Island-based Citizens is listing on the New York Stock Exchange at a lower-than-expected level after taxpayer-owned RBS cut the offer price to 21.50 US dollars from its previous guidance of up to 25 US dollars.

Citizens has 130 billion US dollars (£80bn) in assets, 18,600 workers and 1,370 branches across the New England, mid-Atlantic and Midwest regions.

The Edinburgh-based bank first said it planned to float Citizens, which it bought for 440 million US dollars (£272m) in 1988, last February.

Since its rescue from the brink of collapse in 2008, RBS has focused on offloading many of its foreign and investment banking assets to become a more UK-focused bank centred on retail and commercial banking. The share listing could raise as much as 3.46 billion US dollars (£2.1bn) if an over allotment option is exercised.

The Financial Times said the sale price was cut due to investor concerns over the bank’s ability to deliver on its financial targets.

Citizens was previously reported to be a target for Japanese lender Sumitomo Mitsui as well as Canada’s TD Bank but their interest faltered over price.

Brokers expect RBS to sell off its remaining stake in Citizens by the end of 2016.

Chief executive Ross McEwan said: “The sale of Citizens is an integral part of the RBS capital plan.

“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.”