Citizens IPO: Share price recovers after low float price

 
Tim Wallace
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Ross McEwan is chief executive of RBS
Shares in RBS’ American spin-off bank Citizens jumped sharply yesterday on their first day of trading.

The New York-listed retail bank disappointed on its flotation, with shares sold in the initial public offering (IPO) pricing at $21.50 – below the $23 to $25 RBS had hoped for.

But the price climbed rapidly once the shares were trading openly.

The shares increased 7.35 per cent on the day to close at $23.08 – just above the price RBS had expected when finalising the flotation the day before.

The sale of the initial stake valued the US bank at $3bn, indicating the climb in share price has increased its value by around $200m in one day.

RBS is selling off or shutting down its businesses outside the UK, including this initial 25 per cent stake in Citizens, and focusing on retail and business banking domestically.

The bailed-out bank is also being forced to carve out and sell off a UK retail and business bank, Williams and Glynn, which it is also in the process of selling.

RBS’ shares rose 1.17 per cent on the day.

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