NEW YORK -- Citizens Financial Group (CFG - Get Report) raised about $3 billion in its initial public offering of stock that was priced at $21.50 a share, below the expected range.

The U.S. banking unit of Royal Bank of Scotland (RBS) said late Tuesday that it sold 140 million shares in the IPO that had initially been expected to fetch between $23 to $25 a share.

Citizens has about 1,200 branches across the Northeast and Midwest. RBS is based in the U.K. and is mostly owned by the government.

Citizens said it expects RBS to remain a majority owner of its common stock and have "significant control" of its business. The IPO gave it a market value of about $12 billion.

Its stock will start trading Wednesday on the New York Stock Exchange.

The underwriters of the IPO, led by Morgan Stanley and Goldman Sachs, have the option to buy another 21 million shares to cover any over-allotments, potentially raising Citizen's Financial's proceeds.

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