Citizens Bank May Be Sold Off

Update — The Royal Bank of Scotland has since announced it does not intend to sell Citizens Financial Group (story).

Massachusetts customers of Citizens Bank could find their bank under new ownership. Royal Bank of Scotland, the parent company of Citizens Financial Group, said it will likely have to sell off some parts of its business.

Providence, R.I.-based Citizens is a $153 billion commercial bank holding company that employs about 24,000 people. John Carusone of the Bank Analysis Center in Hartford, Ct., told WBUR the bank would command a high price, either in one piece or broken up in many.

“There’s no shortage of well-capitalized community banks that covet Citizens’ locations,” Carusone said. "They’d be delighted to bid for 15 or 20 branches at a time.”

Citizens is the second largest retail bank in Massachusetts, after Bank of America.

The Royal Bank of Scotland said Monday that negotiations over the bank’s bailout terms with the British Treasury and the European Commission were “in their final stages, and will include some divestments not initially contemplated.” The bank’s shares fell as much as 13 percent in trading Monday.

RBS would prefer not to give up its highly profitable U.S. banking arm, Carusone said, and would probably only do so if forced by European regulators.

“It’s not essential,” Carusone said, “and they need to survive, and this may be a casualty of that survival process.”

Citizens’ value could go a long way in repaying RBS’ bailout from the British Treasury. Carusone said Citizens would probably be worth more sold in pieces, but acquisition by a single entity would be an easier and faster process.

This program aired on November 2, 2009. The audio for this program is not available.

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Curt Nickisch Business & Technology Reporter
Curt Nickisch was formerly WBUR's business and technology reporter.



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