Royal Bank of Scotland announced a sale of its Chicago-based branches to U.S. Bancorp, as the U.K. bank prepares its U.S. retail franchise for an initial public offering later this year. RBS said it would sell 94 branches that operate under its Charter One brand for an undisclosed fee. The Charter One branches had $5.3 billion in local deposits and $1.1 billion in local loans, RBS said. U.S. Bancorp said it would pay a premium on the deposits of $315 million as part of the deal.
For RBS the deal allows it to raise funds to invest in its U.S. franchise ahead of a flotation in the fourth quarter of the year. Following pressure from the U.K. government, which holds an 81% stake in the bank, RBS’s management pledged to list RBS Citizens Financial and refocus on its British operations. RBS has pledged to list RBS Citizens Financial, its U.S. operations. RBS Citizens will keep some activities in the Chicago market, including the consumer-business lines of mortgage lending, education finance and auto finance. The deal is still subject to regulatory approval and is expected to close in the middle of 2014.