The struggling Royal Bank of Scotland is trying to tamp down the latest rumors that it will sell its US subsidiary, Citizens Financial Group, to raise capital, insisting that it plans to hold on to the Providence-based bank.

Speculation that Royal Bank of Scotland might sell Citizens has surfaced periodically in recent years, as the British bank has tried to recover from steep losses during the financial crisis that led to its takeover by the British government. Media reports in the United Kingdom and the United States have recently raised that possibility of a sale again.

“We have always said that Citizens is part of our core plans,” RBS chief executive Stephen Hester told analysts last week. “Citizens is much more valuable to our shareholders today than it was three years ago, and I have every confidence that it will be more valuable again three years from now.”


Citizens has become a reliable profit center for RBS and has helped shore up its earnings. RBS, which is based in Edinburgh, has repeatedly said it remains committed to keeping Citizens, the second-largest bank in Massachusetts and one of the largest regional banks in the Northeast, even as it has been forced to trim other operations around the world.

RBS has lost roughly $3 billion so far this year, largely because of accounting charges, and rumors flared again that it could unload Citizens after revelations that the bank may have helped traders manipulate the Libor lending rate index, which could expose it to lawsuits and government fines. A host of commercial and consumer loan rates, including mortgages, are tied to the Libor index.

On Sunday, the Sunday Times of London reported that a Brazilian bank, Itau Unibanco Holding, was planning to make a bid for Citizens, although Itau Unibanco has denied making any such offer.

Last week, The New York Post reported the bank had informal discussions with Toronto Dominion, the Canadian parent of TD Bank, about buying Citizens a few months ago.

The Post said RBS was seeking $14 billion to $16 billion, while TD was willing to pay $8 billion to $12 billion.

TD Bank spokesman Stephen Knight said the bank doesn’t comment on rumors and is not in a rush to make any deals. But Knight added, “If there is something that makes sense financially and strategically and fits within our risk appetite, we would consider it.”


TD Bank, the fourth largest in Massachusetts, would be a prime candidate to acquire Citizens should it come on the block, because it has extra cash and is trying to expand its US footprint, according to Damon DelMonte, an analyst with investment bank Keefe, Bruyette & Woods of New York.

Other potential suitors could include major banks, such as Wells Fargo & Co. of San Francisco, JP Morgan Chase & Co of New York, and US Bancorp of Minneapolis, which don’t have retail branches in Massachusetts, DelMonte noted. Citizens has 1,400 branches in 12 states, including 254 Massachusetts. It has nearly 19,000 employees, including about 3,400 in Massachusetts.

“At this point, speculation that RBS is looking to sell its US-based Citizens Bank operations is just that — speculation,” DelMonte wrote in a note to investors on Friday. “The timing and probability of such an event remain unclear.”

Todd Wallack can be reached at twallack@globe.com. Follow him on Twitter @twallack.