Royal Bank of Scotland 9RBS) is planning to sell more than $3bn worth of shares in US bank Citizens Financial Group, bringing its stake in bank below 50%.
The bank will sell 115 million shares of Citizens’ common stock and up to another 17.25 million shares in an over-allotment option, equivalent to 24% of Citizen’s issued shares.
RBS, which is majority owned by the UK government, will reduce its stake in Citizens below a third by the end of 2015 with expectations to complete the Citizens sale by the end of 2016 to strengthen its capital ratio by deconsolidating the US company’s assets.
RBS is selling the American bank as part of a retreat to its core UK retail and commercial banking business, a strategy which involves slashing its balance sheet and quitting dozens of countries.
Cutting Citizens’ stake below 30% will allow RBS to scrap the US company’s $89.6bn of risk-weighted assets from its balance sheet.