Report: RBS may have to sell Providence-based Citizens Bank

August 6th, 2012 at 7:55 pm by under Nesi's Notes, On the Main Site

The future of Citizens Bank has been a big question mark locally ever since its U.K.-based parent company Royal Bank of Scotland was rescued by the British government in the fall of 2008, at the height of the financial crisis. RBS remains 82% owned by British taxpayers.

Now RBS is embroiled in the growing interest-rate fixing scandal and may be forced to sell off Citizens, Mark DeCambre reports for the New York Post:

Toronto-Dominion, the Canada-based parent of TD Bank, which operates 1,200 branches mostly in the eastern US, has held informal discussions with RBS about its Citizens Bank unit, sources said.

RBS, said sources, has told interested parties it is looking for $14 billion to $16 billion for the bank — while TD is said to be thinking more along the lines of $8 billion to $12 billion.

The talks were held two or three months ago, these sources said, and are not currently active.

However, Toronto-Dominion believes RBS and the British bank’s CEO, Stephen Hester, may be forced to sell Citizens as it comes under greater scrutiny from regulators amid a growing interest-rate rigging scandal linked to the London interbank offered rate, or Libor, sources said.

Citizens is the second-largest bank in Rhode Island by deposits, with a 22% market share and $10 billion in local assets, according to FDIC data as of June 30, 2011. TD Bank – which expanded to Rhode Island just two years ago – is far down the list with $61 million in assets and just 0.14% market share. A Citizens purchase would quickly vault TD into the top ranks of Northeastern retail banks.

And as if RBS didn’t have enough problems, the WSJ reports the bank is now “in talks with U.S. authorities about its compliance with federal money laundering laws and targeted economic sanctions.”

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5 Responses to “Report: RBS may have to sell Providence-based Citizens Bank”

  1. [...] hoping employees of Citizens Bank don’t have to join them on the unemployment line as a result of RBS’ issues. Either way, it’s high time we [...]

  2. Ed says:

    What do you expect a company based in Rhode Island following the law, that would be a miracle. When are you people going to realize you condone unethical behavior. It is too the point as rule I won’t do busines in Rhode Island. Too many of you are scam artists. You don’t deserve to have customers or being taken care of with federal funds.

  3. Joe says:

    Ed, what are you talking about.
    RBS is based in the UK. Citizen’s is based in RI.
    RBS is the problem in the story, not Citizen’s.
    As you can see Citizen’s is profitable, unlike their parent company.
    Citizen’s would be a good asset for TD’s portfolio.
    RBS in the UK, not RI is the company beset by scandals. Learn how to read before making ignorant posts like that.

  4. [...] an interesting complaint about Citizens Bank gift cards ripoff here.  Citizens parent, “RBS is embroiled in the growing interest-rate fixing scandal and may be forced to sell off [...]

  5. [...] TD Bank has already been cited as a potential buyer of Citizens. Over the weekend a less familiar name emerged: Itau Unibanco Holding, one of [...]