LONDON (The Deal) -- British government-controlled Royal Bank of Scotland Group (RBS) took the first step toward the long-awaited initial public offering of its main U.S. banking operation on Monday, with the registration of an intention to list Citizens Financial Group Inc.
The move could raise as much as $3 billion for Royal Bank as the selling shareholder, according to an estimate by Renaissance Capital LLC analysts, in a report carried on the Nasdaq website. In a Securities and Exchange Commission filing on Monday, Citizens said the initial offering would be of up to $100 million, including stock placed in a potential overallocation option, but made clear this was an estimate made "solely for the purpose of computing the amount of the registration fee."
The filing said Royal Bank of Scotland had appointed Morgan Stanley and Goldman, Sachs & Co. as joint global coordinators and JPMorgan & Co. as joint bookrunner. Citizens' chief legal officer Sheldon Goldfarb turned to Davis Polk & Wardwell LLP and Cleary Gottlieb Steen & Hamilton LLP for external legal advice.
The filing came as Royal Bank continues with its post-crash strategy of shrinking its overseas presence, winding down its investment banking operations and focusing on the U.K. retail and commercial lending markets. Since its 45.5 billion pound ($76.7 billion) taxpayer bailout, the bank has been under political and regulatory pressure to reduce market share, sell off branches and operations and sharply increase its regulatory capital.
The S1 filing contained little information about Royal Bank's ambitions for the offering. It did not specify the exchange where the shares would be listed and gave no timetable for a flotation other than to say it would be "as soon as practicable."