Last checked at 
* Rory Cullinan to lead new Capital Resolution Group
* Cullinan will oversee Williams & Glynn, Citizens IPOs
* RBS places entire shipping business into new division
By Matt Scuffham
LONDON, Dec 18 (Reuters) - Royal Bank of Scotland has named Rory Cullinan, who led the drive to cut back thebank's risky loans, to run its new "bad bank" and manage thestock market flotations for its U.S. bank Citizens and itsWilliam & Glyns network of branches.
RBS, 82 percent-owned by the government, said Cullinan willlead its Capital Resolution Group (CRG), which will include the38 billion pounds ($62 billion) of unwanted assets dubbed thebad bank, as well as the group's shipping business and theoperations due to be spun off.
The internal bad bank was announced last month as part ofmeasures to bolster RBS's capital and speed up its eventualprivatisation.
Cullinan, who had been expected to lead the bad bank, willoversee the sale of Citizens, which analysts have valued atbetween $9 billion and $15 billion. RBS is planning a partialinitial public offering (IPO) of the business in the second halfof 2014 and a full sale by the end of 2016.
Cullinan will also take responsibility for offloading theWilliams & Glyns business, comprising 314 branches, which RBSmust sell under European state aid rules. An IPO of thatbusiness is targeted by 2016.
RBS said on Wednesday its entire shipping business would beplaced inside CRG and Cullinan would oversee its restructuring.However, a spokeswoman said the move didn't mean the bankplanned to exit the shipping industry entirely.
"It's the best way of coherently managing the business tomove it under one executive to reset the strategy," she said.
Last month, sources familiar with the matter told Reutersaround $4 billion to $5 billion of shipping loans were expectedto go into the bad bank, with the total shipping portfoliostanding at an estimated $16 billion. RBS declined to comment onthe size of the assets being transferred.
Reporting to Cullinan, RBS's shipping boss, LambrosVarnavides, will continue to lead the business up until hisretirement in June next year.
As chief executive of the bank's non-core division, Cullinanhas already played a key role in restructuring the bank, whichwas rescued through a 45 billion pound bailout that left thegovernment with an 82 percent stake.
He and previous chief executive Stephen Hester identified258 billion pounds of RBS's most risky loans that would be soldoff or wound down at the start of 2009, only 37 billion poundsof which remain on the bank's books.
Hester's successor Ross McEwan will announce the results ofa strategic review in February.
