Bloomberg the Company

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Follow Us

Industry Products

U.S. Bancorp Said to Be Top Suitor for Citizens Chicago Branches

Don't Miss Out —
Follow us on:

Nov. 19 (Bloomberg) -- U.S. Bancorp, the largest bank based in the Midwestern U.S., is the leading contender to buy the Chicago branches of Citizens Financial Group Inc. because smaller bidders are wary of raising capital to fund the deal, people with knowledge of the matter said.

The Minneapolis-based bank is in talks with Citizens, the U.S. subsidiary of Royal Bank of Scotland Group Plc, about buying 100 branches, said the people, who asked not to be identified because the information is private. The talks may not lead to a sale, and Citizens is still engaged with other potential buyers, one person said.

U.S. Bancorp is the largest of the lenders who expressed an interest in the branches, and others may have to raise funds to assume Citizens’ liabilities and pay for the purchase, the people said. The branches hold $6 billion in deposits and $2.4 billion in loans, mostly home-equity lines of credit, the people said.

The sale, which could fetch $500 million, also drew interest from Fifth Third Bancorp, PrivateBancorp, Wintrust Financial Corp. and FirstMerit Corp., people familiar with the bidding said last month.

With $361 billion in assets at the end of September, and a market value of over $70 billion, U.S. Bancorp has long been interested in expanding in Chicago, among the largest and most fragmented markets in the U.S. It plans to continue doing small deals, according to Chief Executive Officer Richard Davis.

“We will continue to cobble together small M&A deals, some of which won’t even hit your radar screen,” Davis said at a conference last week sponsored by Bank of America, according to a Bloomberg transcript of the event.

IPO Plan

U.S. Bancorp has 72 branches in Chicago, according to data from the Federal Reserve. Buying Citizens’ branches in the city would boost its market share of the region’s deposits to 6th from 11th, the data show.

Citizens, based in Providence, Rhode Island, is working with Bank of America Corp. on the branch sale. Spokesmen for Citizens, U.S. Bancorp and Bank of America all declined to comment, while spokesmen at the other bidders didn’t return calls seeking comment.

RBS, which is majority owned by the U.K. government, announced a restructuring this month that involves an initial public offering of Citizens in the second half of next year. Citizens has $118 billion in assets and about 1,400 branches in 12 states, according to its website.

To contact the reporter on this story: Matthew Monks in New York at mmonks1@bloomberg.net

To contact the editor responsible for this story: Jeffrey McCracken at jmccracken3@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.