RBS.L Regulatory News (RBS)

28 July 2015

Intention to Sell Part of Citizens Financial Group Inc. Stake

The Royal Bank of Scotland Group plc ("RBSG") today announces it intends to sell part of its shareholding in Citizens Financial Group Inc. ("CFG" or "Citizens") in an underwritten public follow-on offering ("the Offering").

RBSG is offering 75 million shares of Citizens' common stock, equivalent to 14.0% of CFG's issued and outstanding common stock excluding an over-allotment option. A further 11.25 million shares will be made available by RBSG under a 30 day over-allotment option.

If all the CFG shares made available in the Offering are sold, assuming no exercise of the over-allotment option, RBSG's remaining stake would comprise 144.0 million shares, equivalent to 26.8% of CFG's issued and outstanding common stock. If the over-allotment option is exercised in full, RBSG's remaining stake would be 132.7 million shares or 24.7% of CFG's issued and outstanding common stock.

Following completion of the Offering, RBSG will no longer consolidate CFG in its financial statements and it will account for its remaining interest as an associated undertaking. RBSG will however continue to fully consolidate Citizens for regulatory reporting purposes as it will retain certain veto rights notwithstanding the reduction in its interest in CFG. Therefore, RBSG will continue to include the Risk-Weighted Assets ("RWAs") of CFG in its consolidated RWAs at the current time.

It is also the intention that Citizens will repurchase a further $250m of CFG common stock from RBSG at the Offering price in a directed buy back.

Notes:

Morgan Stanley and Goldman, Sachs & Co are acting as global coordinators and joint book-running managers, and J.P. Morgan and Citigroup are acting as joint book-running managers for this offering. The prospectus relating to the Offering may be obtained by calling Morgan Stanley & Co. LLC toll free at (866) 718-1649, Goldman, Sachs & Co. toll free at (866) 471-2526, J.P. Morgan Securities LLC toll free at (866) 803-9204, or Citigroup Inc. toll free at (800) 831-9146.

The registration statement relating to these securities has been filed with the Securities and Exchange Commission, but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

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