RBS plans IPO for U.S. arm Citizens in next two years
By Steve Slater
LONDON Feb 24 (Reuters) - British state-backed lender Royal Bank of Scotland is set to signal this week that it plans a partial sale of its U.S. bank Citizens this year or next, a source close to the matter said.
RBS will say at its annual results on Thursday that its preferred option for Citizens is an initial public offering (IPO) in New York to sell about 20-25 percent of the bank, the source said.
Britain's financial regulator has put pressure on RBS to sell Citizens, which analysts have valued at between $9 billion and $15 billion, to bolster its capital and concentrate its focus on its core UK business.
The bank announced on Sunday that it is to cut jobs in India as a part of its plan to wind down retail and commercial operations in the country.
However, it is keen to avoid selling Citizens at a knock-down price, and a partial share offering would create price transparency and improve its strategic options, the source said
The board has not finalised the plan, but the Financial Services Authority appears to be supportive, he added.
Canada's Toronto Dominion Bank has for some time been seen as a possible buyer of Citizens. Other suitors could include U.S. regional banks PNC and U.S. Bancorp or Brazil's Itau Unibanco, bankers and analysts have said.
RBS declined to comment. Continued...