Royal Bank of Scotland (RBS) has reportedly resisted renewed pressure from the UK government to sell its US-based retail subsidiary Citizens Bank.
The government, owner of 81% of RBS, encouraged RBS to dispose of the $140bn assets Citzens unit as part of the bank’s drive to slim down its operations and refocus on its home market, according to a report in The Wall Street Journal.
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RBS acquired a controlling interest in Citizens in 1988 for $440m and the interim period has made further major investment in the bank, the 17th-largest US lender by deposits.
Analysts forecast that RBS would expect to realise around $6.6bn in the event of disposing of Citizens.
Citizens ranks as the 9th-largest US retail bank by branches and ended the first half of the year with 1,411 outlets (down 116 from 1,527 in June 2011).
A report released in early October from consultants GfK highlighted Citizens’ success in improving its customer service levels.
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By GlobalDataGfK’s Loyalty Benchmark Plus study covered 10 major US retail banks.
Citizens (together with USAA) showed the highest year-over-year increase in overall customer loyalty scores, with gains of 6 points and 3 points, respectively.
The report covered four key segments of customers in terms of their loyalty: Loyal Advocates, Hostages (troubled by sources of dissatisfaction), Ambivalent (generally satisfied but still at risk of being lured away), and Exit Bound.
Across the 10 banks as a whole, the report noted that around 18% of customers were Exit Bound.
