Royal Bank of Scotland (RBS) is likely to select Morgan Stanley as the lead underwriter for the proposed initial public offering (IPO) of its US subsidiary, Citizens Financial Group, according to reports.

In February, RBS said it would sell 20%-25% of Citizens by the end of 2014 through an IPO in New York. According to analysts, the total value of the Citizens assets could be in between $9bn-$15bn.

Sources familiar with the matter were quoted by Reuters as saying that RBS is also working with other banks to add more underwriters for the Citizens offering.

However, the sources said that a final decision is yet to be reached. Meanwhile, both the parties declined to comment when questioned about the selection.

In 2008, RBS was bailed out through £45bn investment by the UK government and since then it had sold around £900bn worth assets to raise capital and focus on lending to British households and small businesses.

RBS, which is under pressure from British regulators to sell off non-core assets, is not keen to sell the US subsidiary at a small price, according to sources.