RBS floats Citizens Financial in New York

23rd Sep 2014 09:37

Royal Bank of Scotland (RBS) is poised to raise around £2bn as it floats shares of its US-based Citizens Financial Group subsidiary in New York at between $23 and $25 per share on Tuesday.After completing a two-week investor roadshow, RBS is expected to price an initial public offering (IPO) of 25% of Citizens shares on Tuesday.If the shares are priced at the top end of the scale, the sale could net RBS $3.4bn and give Citizens a market capitalisation of $14bn.Earlier this month, RBS set out a price range for an inital sale of 140m Citizen shares and has also allowed for a possible 30-day overallotment or 'green shoe' option for up to an additional 21m shares, which could mean the bank nets a grand total of up to $4bn for selling a 29% stake.Spinning Citizens off its books will allow RBS, which is more than three-quarters owned by the UK government, to improve its balance sheet, allowing it to increase its capital ratio by between two and three percentage points, according to analysts.Citizens chief executive Bruce Van Saun is expected to receive a bonus of almost $5m as a result of the IPO, vesting in 2016 and 2017, with four other board members together pocketing a further $4.1m.