Fitch: RBS Citizens Financial Group, Inc. Ratings Not Affected by Partial IPO Announcement

NEW YORK--()--The announcement by Royal Bank of Scotland Group PLC (RBS) to prepare a partial initial public offering (IPO) of RBS Citizens Financial Group, Inc. (CFG) has no immediate ratings implication for CFG and its related subsidiaries, according to Fitch Ratings.

Fitch classifies each rated subsidiary as being either 'core', 'strategically important' or of 'limited importance' to the parent institution. Fitch has maintained that CFG is strategically important to RBS, and thus CFG's Issuer-Default Rating (IDR) of 'A-' is notched once from RBS's IDR of 'A'. Fitch's view recognizes that while CFG may likely divest a portion of its stake, it is expected to retain majority control and will remain subject to Dodd-Frank's 'source of strength' provision. Since CFG is already classified as strategically important, its ratings already reflect the impact from the partial IPO. Therefore, CFG's ratings are appropriately situated one notch below RBS.

Further, CFG's 'BBB' subordinated notes rating is notched off CFG's viability rating (VR) of 'bbb+', as Fitch does not presume parental or sovereign support for these instruments. As such, the subordinated debt ratings are unaffected by changes to ownership by the parent.

Further divestiture of CFG significantly beyond 25 percent of equity would likely result in an additional review by Fitch. Fitch could re-classify CFG as 'limited importance', which might have negative ratings implications for CFG's IDRs. See Fitch's criteria report 'Rating FI Subsidiaries and Holding Companies' for more information on this topic.

Fitch rates RBS Citizens Financial Group and subsidiaries as follows:

RBS Citizens Financial Group, Inc.

--Long-term IDR 'A-'; Outlook Stable;

--Short-term IDR 'F1';

--Viability rating 'bbb+';

--Subordinated debt 'BBB';

--Support rating '1'.

RBS Citizens, NA

--Long-term IDR 'A-'; Outlook Stable;

--Short-term IDR 'F1';

--Viability rating 'bbb+';

--Support rating '1';

--Long-term deposits 'A';

--Senior Unsecured 'A-';

--Short-term deposits 'F1'.

Citizens Bank of Pennsylvania

--Long-term IDR 'A-'; Outlook Stable;

--Short-term IDR 'F1';

--Viability rating 'bbb+';

--Support rating '1';

--Long-term deposits 'A';

--Short-term deposits 'F1'.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Global Financial Institutions Rating Criteria' (Aug. 15, 2012);

--'Rating FI Subsidiaries and Holding Companies' (Aug. 10, 2012);

Applicable Criteria and Related Research

Global Financial Institutions Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=686181

Rating FI Subsidiaries and Holding Companies

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=679209

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Contacts

Fitch Ratings
Primary Analyst
Jaymin Berg, CPA, +1-212-908-0368
Director
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
Secondary Analyst
Christopher Wolfe, +1-212-908-0771
Managing Director
or
Media Relations:
Brian Bertsch, New York, +1 212-908-0549
Email: brian.bertsch@fitchratings.com

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Contacts

Fitch Ratings
Primary Analyst
Jaymin Berg, CPA, +1-212-908-0368
Director
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
Secondary Analyst
Christopher Wolfe, +1-212-908-0771
Managing Director
or
Media Relations:
Brian Bertsch, New York, +1 212-908-0549
Email: brian.bertsch@fitchratings.com