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RBS Citizens Financial Group has appointed Ellen Taylor as executive vice president and head of investor relations, where she will oversee the Providence, R.I., company's preparations to become a public company later this year.
March 17 -
Banks of all sizes are struggling to increase the revenues and profits that they can eke out of their retail operations while trying to elbow their competitors out of the same turf. To do so, bankers need to face some hard truths about their branches, technology and M&A ambitions.
March 11 -
Royal Bank of Scotland has accelerated its plans to sell its U.S. subsidiary. The company will conduct a partial initial public offering of its Citizens Financial Group unit in the second half of 2014, and plans to fully divest itself through offerings in 2015 and 2016.
November 1 -
Royal Bank of Scotland's U.S. subsidiary is adding staff in lending and wealth management under new CEO Bruce Van Saun as it looks looks to boost its loan portfolio and improve its revenues ahead of its widely anticipated public stock offering.
October 4 -
The current bank M&A market is too hostile for Royal Bank of Scotland to consider completely selling off its U.S. subsidiary, the incoming chief executive of that unit says.
September 9
ORLANDO Bruce Van Saun plans to start separating RBS Citizens from the Royal Bank of Scotland later this year. But as in all divorces, first he must face the devil in the details.
RBS sent Van Saun to take over Citizens Financial Group
But before he can sell his bank to shareholders, Van Saun has to resolve all of the mundane, logistical problems that accompany most breakups. Perhaps most importantly, Citizens needs to develop the internal infrastructure to stand on its own as a bank, rather than a unit of a foreign parent company.
"How do we separate from RBS and then up our game, so that we can perform like a public company?" he said in an interview.
(The Providence, R.I., bank is also
The bank particularly needs to improve its internal financial reporting capabilities, according to Van Saun. It has issued some public debt on its own, but as a unit of a larger foreign company, RBS Citizens has not had to report its results or deal regularly with shareholders. Now Van Saun
"The bar's higher when you're actually a public company and you have equity shareholders and you have to do quarterly conference calls and all that," Van Saun says.
He also faces some potential custody battles, or what he calls "just pure separation" issues: "There are things that we do for RBS, and things that RBS will do for us, which we have to figure out how to separate."
For example, Citizens currently runs a U.S. data center also used by the Royal Bank of Scotland's investment banking operations in this country, "and so they'll need to be able to have their own capability" or at least hammer out an agreement to continue using the Citizens unit, Van Saun says.
The commercial bank and the British investment banking unit also currently share a central entity for their human resources, training and payroll needs, "so we've devolved those and figured out how to cut them," he adds.
Citizens won't cut all ties with RBS; Van Saun says the bank will "maintain a business relationship" with its current parent, in part to offer U.S. customers access to cash-management, foreign exchange and other treasury services offered by international companies.
Of course, in order for the public offerings to be a success, Van Saun also has to sell investors on the overall performance of RBS Citizens which he acknowledges is still lagging.
"Our financial performance still needs to improve," but "Rome isn't built in a day," he says, adding that the bank hopes that "progress will be evident by the later part of the year. It still won't be where we fully want it to be, but I think that we'll be able to demonstrate that there [are] programs in place and they will bring us towards an upward trajectory and towards a good destination in 2015 and 2016."
He also acknowledges that "like all banks, we have work to do on the regulatory front. So one of the things we're conscious of is, we're not cutting any corners to put profitability as number one."
Last year, Citizens
Technology and internal systems are another area where RBS Citizens has been spending money to retrofit recently. Under Van Saun and his predecessor, Ellen Alemany, the bank has spent $900 million since 2009 on "major projects, most of which is technology," and the bank will devote another $500 million to that through next year.
"A little of what we're doing is still playing catch-up on some of the core systems," Van Saun says. "Maybe five to ten years ago, we were spending too little.... and you've got to make some offensive investments in addition to playing catch-up."
He spoke after giving a presentation to Retail Banking 2014, an American Banker conference.
