RBS share price: Lender trims stake in Citizens ahead of results

on Jul 29, 2015
Updated: Oct 21, 2019

Royal Bank of Scotland Group Plc (LON:RBS) is trimming its stake in its US business Citizens, the blue-chip lender has said. The news comes ahead of RBS’ second-quarter results tomorrow when the blue-chip lender is expected to report an attributable loss of £260 million, with restructuring and litigation charges continuing to weigh on the company’s performance.

RBS’ share price has advanced in morning trade, having gained 0.51 percent to 353.50p as of 08:13 BST. The gains are largely in line with the broader London market, with the blue-chip FTSE 100 index currently standing 0.63 percent higher at 6,596.58 points.
RBS announced in a statement this morning that it was selling a further 16 percent from its stake in Citizens at $26.00 per share. 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.

Commenting on the sale, RBS’ chief executive Ross McEwan said that the disposal was “an integral part” of the FTSE 100 lender’s capital plan. He added that the bank was now “targeting to be able to exit Citizens fully by the end of 2015, a year ahead of the original deadline”.
RBS noted that it would no longer consolidate Citizens in its financial statements, recognising an estimated £1.1 billion gain upon deconsolidation, with the news coming ahead of the blue-chip group’s results statement tomorrow. The Financial Times yesterday quoted analysts as forecasting a second-quarter underlying profit of £1.2 billion and an attributable loss of £260 million, following an expected £1.2 billion of restructuring costs, and conduct and litigation charges.
Chirantan Barua, an analyst at Bernstein, told the newspaper that he expected RBS’ restructuring charges to come in much higher than in previous quarters at about £850 million. He, however, forecasts that the bank’s capital build will ‘take the headlines’, with a capital buffer of 12.3 percent.
As of 08:57 BST, Wednesday, 29 July, Royal Bank of Scotland Group share price is 353.90p.

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