RBS Completes Sale of Stake in Citizens Financial Group

By Razak Musah Baba

LONDON--Royal Bank of Scotland Group PLC (RBS) has sold its remaining stake in Citizens Financial Group, Inc., for $2.6 billion, as part of RBS's move to improve its capital ratio.

The bank, in which the U.K. has a 73% stake, confirmed Friday it has sold 110 million shares, or 20.9% of Citizens common stock, at a price per share of $23.38.

The net proceeds of $2.6 billion will be used for general business purposes, it said. The sale will result in a pretax gain of around 100 million pounds ($153.1 million) in the fourth quarter, it added.

RBS is undergoing a multiyear restructuring to simplify its operations and refocus on its home markets.

"The completion of the sale of Citizens is a critical part of our capital plan and further improves our CET1 capital ratio. A strong capital position is the essential platform on which we will continue to build a simpler, stronger and more efficient U.K.-focused bank that can better serve the needs of its customers." RBS Chief Executive Ross McEwan said.

Citizens, a regional lender based in Providence, R.I., said Thursday that RBS expects its designee to the Citizens board to resign when the sale is completed.

In March, RBS raised $3.2 billion through the sale of Citizens shares. In July, RBS announced another sale of Citizens stock valued at up to $2.6 billion, including overallotments.

Shares in RBS, which Friday reported a rise in third-quarter net profit, were down 5 pence, or 1.7%, at 315 pence in midday trading, valuing the company at GBP52.57 billion.

RBS revenue fell 16% to GBP3 billion, and the bank made an operating loss of GBP134 million in the quarter, down from a profit of GBP1.1 billion the year before.

-Josh Beckerman contributed to this article

Write to Razak Musah Baba at [e-mail]; Twitter: @Raztweet

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(END) Dow Jones Newswires

October 30, 2015 09:17 ET (13:17 GMT)

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