13th May 2014 05:32
LONDON (Alliance News) - Commercial bank holding company Citizens Financial Group, Inc., owned by British lender Royal Bank of Scotland Group PLC, revealed in a regulatory filling on Monday its plan to raise up to USD100 million in an initial public offering of its common stock in the US
The Providence, Rhode Island-based company said it intends to apply to list its common stock under the ticker symbol 'CFG.' However, the company did not reveal the stock exchange to be listed on, the number of shares, and the estimated price range for the offering.
In a Form S-1 filing with the US Securities and Exchange Commission, the British-owned American bank said the shares of common stock will be offered by the selling stockholders, and that it will not receive any of the proceeds from the sale.
Morgan Stanley & Co. LLC, Goldman, Sachs & Co, and J.P. Morgan Securities LLC are the lead underwriters for the offering.
In November 2013, RBS had announced that it would accelerate the divestment of Citizens with a partial IPO and that it planned to fully divest the business by the end of 2016.
A Wall Street Journal report in late March revealed that RBS was in preliminary talks with Japanese lender Sumitomo Mitsui Financial Group Inc. (SMFG) for a sale of RBS' US retail business.
According to the WSJ report, RBS was seeking to raise at least USD10 billion from the planned IPO of Citizens. The amount to be raised through the proposed offering is expected to increase substantially once bankers start testing investor demand.
The move to spin-off Citizens into a standalone company through an IPO comes as part of a broader effort by its owner RBS, 81% owned by the British government, to bolster its capital in the event of another financial crisis amid pressure from British regulators. RBS was once a failing bank that was bailed using nearly USD70 billion of British taxpayers money.
RBS bought the Citizens in 1988 for USD440 million, but has been under pressure from UK regulators to sell its foreign holdings and non-core assets ever since it was bailed out by the UK government. RBS had pledged to list Citizens Financial and refocus on its British operations.
RBS said last year that it would sell 20 to 25% of Citizens by the end of 2014 through a US IPO. The IPO will pave the the way for the return of billions of dollars of capital to the UK regulators.
According to SNL Financial, Citizens Financial is the 13th largest retail bank holding company in the US, with nearly 1,400 branches and over 3,500 ATMs across 12 US states as well as USD122.2 billion of total assets as of December 31, 2013. The company also generated revenues of USD4.70 billion for the year ended December 31, 2013.
The company delivers a broad range of retail and commercial banking products and services to about five million individuals, institutions and companies. Its consumer banking division serves retail customers and small businesses with annual revenues of up to USD25 million, while its commercial Banking division primarily targets companies and institutions with annual revenues of USD25 million to USD2.0 billion.
Earlier, Citizens agreed in January 2014 to sell the Chicago branch banking operations of the Charter One Bank franchise, owned by Citizens, to US Bancorp (USB) along with certain assets and deposits, and expect to close the transaction in mid-2014.
RBS closed Monday's regular trading session at USD11.01, up USD0.06 or 0.55% on a volume of 0.79 million shares.
Copyright RTT News/dpa-AFX
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