Citizens’ planned IPO way to help pay U.K. debt

By Rhonda Miller
PBN Staff Writer

Providence-based RBS Citizens Financial Group has chosen a new leader specifically to prepare for a partial IPO planned for 2015, replacing Chairman and CEO Ellen Alemany, named one of 10 CEOs to watch this year by American Banker. More

To continue reading this article, please do one of the following.



BANKING

Citizens’ planned IPO way to help pay U.K. debt

By Rhonda Miller
PBN Staff Writer

Posted 5/20/13

Providence-based RBS Citizens Financial Group has chosen a new leader specifically to prepare for a partial IPO planned for 2015, replacing Chairman and CEO Ellen Alemany, named one of 10 CEOs to watch this year by American Banker.

Whether Alemany is truly ready for retirement, as was announced, remains to be seen. But the changes set in motion by the parent company, Royal Bank of Scotland PLC, are being closely watched by the Rhode Island financial community amid speculation about the bank’s future. At stake locally is the state’s ability to maintain, or even add to, jobs as a result of the public offering of a 25 percent stake in RBS Citizens, which employs 5,400 in Rhode Island.

“RBS took a bailout from the U.K. government and the bank is under great pressure from the government to … begin to repay the capital infusion,” said Robert Cusack, portfolio manager for Providence-based investment advisers WhaleRock Point Partners. “So the management of RBS has come up with a plan to do an [initial public offering] of stock for a portion of their holding in Citizens.”

The Financial Times on May 3 reported that, “Senior Conservative politicians have been stepping up efforts to prepare for a re-privatization of RBS … before the 2015 general election.”

According to Cusack, “These are political judgments, not business judgments. It’s all about the pressure. The elected officials in the U.K. want to be able to say to their constituents they’re pressing this private company to return all this taxpayer money that’s been invested in it.”

In 2008, the British government pumped $71 billion into the bank “to keep RBS afloat,” according to an Oct. 21, 2011 article in Dealbook, a financial news service produced by The New York Times.

“Just the announcement of the IPO took some of the pressure off RBS,” Cusack said. “RBS will wait as long as they can because they think the value of Citizens is rising. So they’re in no hurry to sell Citizens. In fact, I believe they really have no interest in selling Citizens.

“The valuation of banks is not back to what it was prior to the crisis. But they are up in value significantly from the bottom,” he said.

Next Page
Calendar
PBN Hosted
Events

Two Great Programs...One Great Event. PBN's Annual Celebration of Growth and Innovation is now underway. 2014 applications are now available. Deadline August 1st.
  • Healthiest Employers
    Celebrate with the Healthiest Employers in RI on August 14th at the Providence M ...
  • 40 Under Forty
    Thank you to our sponsors and to all those who attended the 10th Anniversary of ...
Advertisement
Purchase Data
Book of Lists
Lists
Book of Lists cover
PBN's annual Book of Lists has been an essential resource for the local business community for almost 30 years. The Book of Lists features a wealth of company rankings from a variety of fields and industries, including banking, health care, real estate, law, hospitality, education, not-for-profits, technology and many more.
Data icons
Data can be purchased as single lists, in either Excel or PDF format; the entire database of the published book, in Excel format; or a printed copy of the Book of Lists.
  • Purchase an e-File of a single list
  •  
  • Purchase an e-File of the entire Book of Lists database
  •  
  • Purchase a printed copy of the Book of Lists
  •  
    National
    Local
    Latest News
    Advertisement