Citizens to sell Charter One Chicago retail branches for $315M
THE SALE OF 94 of its Chicago-area Charter One bank branches is part of the ongoing preparation that RBS Citizens Financial Group CEO Bruce Van Saun is making for an expected public offering of the bank to be held later this year.
PROVIDENCE – RBS Citizens Financial Group is selling 94 of its Chicago-area Charter One bank branches for $315 million to U.S. Bancorp, Providence-based Citizens announced Tuesday.
The agreement includes Charter One retail branches, small business operations and some middle-market relationships. RBS Citizens will keep its Chicago-area commercial business lines and several consumer business lines.
“We had a good business, but a relatively modest market share, in the Chicago region,” RBS Citizens CEO Bruce Van Saun told Providence Business News. “We were under 2 percent in terms of deposit market share, which was about 12 or 13 market rank. From a geography standpoint, Chicago is quite isolated from the rest of the franchise.”
Van Saun took the helm of RBS Citizens in October, as the bank prepares to take 25 percent of its business public toward the end of 2014. October is likely the prime month for the IPO, Van Saun said Tuesday. Citizens announced it expects to be fully public by the end of 2016.
Citizens’ parent company Royal Bank of Scotland PLC got a bailout of $70 billion from the British government in 2008, and the bank has been under pressure to return taxpayer money.
The sale of the Charter One branches is part of bank’s consolidation of resources as it heads toward the IPO and Providence is holding steady as the Citizens headquarters as the strategy unfolds, Van Saun said.
“Our decision was to take some capital out of the Chicago region, pocket that gain and reinvest in the remaining franchise where we have relatively stronger market positions,” said Van Saun. “Rhode Island is an area where we have quite a strong market position, and we see the potential to grow the business there, as well as in New England overall.”
RBS Citizens is in the process of hiring several hundred new employees, including mortgage originators, small business bankers, wealth advisers and on the commercial side adding seasoned relationship officers and adding to capital markets capabilities, he said. The hiring is across the Citizens’ footprint and is about one-quarter to one-third complete, Van Saun said.
Of 18,000 Citizens employees, Rhode Island currently has 5,390. Along with the hiring, Citizens will also be trimming down in some areas, although no major loss or gain in employment is expected in Rhode Island, he said.
“Providence has served us well for a long time, both as the headquarters and as a major operations site, and I don’t see any reason to change that,” Van Saun said. “We have a lot of other fish to fry at the moment.“
Van Saun said he will be Providence on Thursday for a town hall meeting with key people in the Rhode Island marketplace and will be visiting clients at their businesses.