RBS Citizens Financial Group Inc., the U.S. branch of
The Royal Bank of Scotland Group plc
), is en route to expand its commercial banking business by hiring
70 employees. The new commercial bankers will be engaged in
Pittsburgh and other existing markets as well as new cities like
Atlanta, Charlotte, N.C., Dallas, Washington, D.C. and Los Angeles.
RBS Citizens plans to focus on sectors like health care, technology
and franchising, while concentrating on companies with yearly
revenues of more than $500 million. Moreover, the bank intends to
provide acquisition finance, cash management and hedging services
and attain capital markets business.
The Real Purpose Behind the Expansion
RBS Citizens has been vying for expansion to appear lucrative for
the impending divestiture from its UK-based parent company. In Nov
2013, The Royal Bank of Scotland had declared that it would start
the initial public offering (IPO) of RBS Citizens in mid 2014 and
gradually exit this subsidiary by 2016.
A new chief executive was appointed for RBS Citizens to prepare it
for the IPO by boosting returns, expanding balance sheet and
enhancing the mortgage banking, auto finance and small business
banking activities of the bank.
Additionally, RBS Citizens has been simultaneously selling-off
unproductive branches and cutting jobs to control costs. The bank
divested 94 branches in Chicago to U.S. Bancorp (
) earlier this year.
The Royal Bank of Scotland filed for the IPO of RBS Citizens in May
2014. Furthermore, the first offer of the series - around
20-25% of RBS Citizens - is expected to take place this year.
Mitsubishi UFJ Financial Group Inc. (
) of Japan and The Toronto-Dominion Bank (
) of Canada are possible contenders in the proposed sale.
RBS Citizens' expansion strategy and cost-cutting initiatives are
vital steps for future growth, especially after its failure to
clear the Federal Reserve's stress test. The options to get a good
deal were narrowed after the bank's capital plan was rejected by
Currently, The Royal Bank of Scotland carries a Zacks Rank #3
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
US BANCORP (USB): Free Stock Analysis Report
ROYAL BK SC-ADR (RBS): Free Stock Analysis
MITSUBISHI-UFJ (MTU): Free Stock Analysis
TORONTO DOM BNK (TD): Free Stock Analysis
To read this article on Zacks.com click here.