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RBS Gains After Report That Sumitomo Mitsui May Bid for Citizens

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March 24 (Bloomberg) -- Royal Bank of Scotland Group Plc rose in London trading after the Wall Street Journal reported that Sumitomo Mitsui Financial Group Inc. may bid for the Edinburgh-based lender’s U.S. retail banking unit.

Executives from the two banks met recently to discuss the possible purchase of RBS Citizens Financial Group Inc., the newspaper reported, citing people familiar with the talks. Any deal has less than a 50 percent chance of completion, the WSJ said.

RBS shares jumped as much as 2.5 percent after the report and closed 1.5 percent higher at 303.6 pence in London trading. RBS is Britain’s biggest state-owned lender, while Sumitomo Mitsui is Japan’s second-biggest bank by market value.

The British bank is open to takeover offers for Citizens as it prepares the division for an initial public offering this year, Bruce Van Saun, CEO of the Providence, Rhode Island-based subsidiary, said in an interview in January.

“We announced in November 2013 that we would accelerate the IPO of Citizens, aiming to start the process in the second half of 2014 and to fully sell the business by the end of 2016,” RBS spokeswoman Debbie Phillips said in a statement today. “That is our plan.”

Representatives of Sumitomo weren’t immediately available to comment.

RBS Chief Executive Officer Ross McEwan outlined plans to return the bank to profit when it posted full-year results on Feb. 27. The Edinburgh-based lender will reduce risk-weighted assets in its international banking and securities unit by about a third by 2020.

To contact the reporter on this story: Gavin Finch in London at gfinch@bloomberg.net

To contact the editors responsible for this story: Edward Evans at eevans3@bloomberg.net Keith Campbell, Frank Connelly

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