RBS Citizens Bank is slimming down its franchise and will sell 94 Chicago-area branches for $315 million, the Providence-based financial institution announced Tuesday.
Citizens, which operates as Charter One Bank in Chicago, plans to sell most of its retail operations there to US Bancorp in a deal expected to close in the middle of this year. Citizens will keep its consumer mortgage lending, auto financing, and commercial lending businesses in Chicago.
The sale, which requires regulatory approval, will allow Citizens focus on markets where it can grow, said Bruce Van Saun, CEO of RBS Citizens Financial Group. Proceeds will be used to hire more staff and add products that should make the bank more appealing to investors.
Citizens plans to sell a 25 percent share through an initial public offering later this year.
The sale represents only about 7 percent of Citizens total branch network and 5.2 percent of its overall deposits, but it’s a reversal of Citizens longtime strategy, which focused over much of the past two decades on acquiring smaller banks and expanding its reach from New England to Pennsylvania to the Midwest.
Citizens is owned by Royal Bank of Scotland, which has been under significant financial and regulatory pressure after it was taken over by the British government in a $70 billion bailout during the 2008 global financial crisis.