UK’s RBS ends plan to sell UAE transaction services to ADCB

RBS has granted investment banks handling the sale the option to place an additional 11.25 million shares as part of the stock offering.

After this selloff, RBS will no longer consolidate Citizens into the group financial results, as the stake is shrinking so rapidly.

Concurrently, Citizens also intend to repurchase a further 9.6m shares of its common stock from RBS at the offering price in a directed buy back.

RBS bought Citizens, based in Providence, Rhode Island, in 1988 and expanded it with 25 acquisitions, including the US$10.5 billion purchase of Charter One in 2004. However, the bank will have to continue to include the business for regulatory reporting purposes, and that would delay a boost to RBS’s capital ratios.

The sale marks the second time RBS has reduced its holding in its U.S. consumer bank this year, as part of Chief Executive Officer Ross McEwan’s plan to shrink global operations and return to profit after seven straight annual losses.

RBS should get a boost of about 200-300 basis points to its core capital ratio once Citizens is fully stripped out, Reuters reported, citing industry sources.

Tomorrow’s results come amid speculation over the timing of the UK government’s first move to sell off shares in RBS.

That could be valuable to RBS, as its capital could be weakened when it settles claims it misled investors in US mortgage-backed securities.

The bank could have to pay anything between 3 billion and 9 billion pounds to settle the matter, analysts estimate. Wednesday announced the final pricing of the offering of shares in Citizens Financial Group, Inc. The Offering comprises 86 million shares, or 16.0%, of Citizens common stock at a public offering price per share of $26.00. Following the offering, which is expected to raise gross proceeds of $2.2 billion (£1.4 billion), RBS will retain 23.4 percent in the US bank.