25th Mar 2014 06:32
LONDON (Alliance News) - British lender Royal Bank of Scotland Group PLC is in preliminary talks with Japanese lender Sumitomo Mitsui Financial Group Inc. for a sale of RBS' US retail business, the Wall Street Journal reported Monday, citing people familiar with the talks.
RBS Citizens Financial Group Inc. has nearly 1,400 branches and over 3,500 ATMs across 12 US states and owns USD122 billion in assets.
Citizens traces its origins to High Street Bank, established in 1828 in Providence, Rhode Island. In 1871, the bank established its own savings bank, Citizens Savings Bank. In late 1988, the company became a wholly-owned subsidiary of RBS. Currently, the company is one of the 15 largest commercial banking companies in the US
A deal will enable Sumitomo Mitsui, Japan's second-largest bank, to gain a foothold in the US and also make it easier for the bank to obtain US dollars to fund overseas lending. It would also be one of the largest bank takeovers following the 2008 financial crisis.
RBS, 81% owned by the British government, already has plans for an initial public offering of some RBS Citizens shares later in 2014. The move, amid pressure from British regulators, is part of a broader effort by RBS to bolster its capital in the event of another financial crisis. The bank has said it plans to unload all of RBS Citizens by the end of 2016.
According to the WSJ report, RBS is seeking to raise at least USD10 billion from the planned IPO of Citizens, and therefore, Sumitomo Mitsui will be required to offer more than that for an acquisition.
RBS closed Monday's trading at USD10.09, up USD0.23 or 2.33% on a volume of 1.67 million shares.
SMFG closed Monday's trading at USD8.27, down USD0.13 or 1.55% on a volume of 1.11 million shares.
Copyright RTT News/dpa-AFX
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