RBS targets $2.2bn with further Citizens Bank sell-off

If all the shares are sold, it would represent 16 per cent of Citizens and reduce the Edinburgh-based lender’s stake to 132.7 million shares - or from 40.8 percent to 26.8 percent.

The stock sale plan also includes a provision granting the underwriters an option to purchase up to 11.25 million additional shares that would cut RBS’ ownership further to 24.7 percent.

The 80 per cent government bank is hoping to raise up to $2.2 billion (£1.4bn) from the sell-off at Monday’s closing price of $25.94 per share.

RBS sold a first slice of Citizens in an initial public offering to the New York Stock Exchange in September and sold another chunk of shares in March.

It has said it plans to have no ownership left in Citizens by 2016.

The European Union ordered RBS to sell off the bank, which focuses its operations on the US eastern seaboard, as a condition of its taxpayer bailout at the height of the financial crash in 2008.

Chancellor George Osborne said in June the UK government will begin selling its stake in RBS “in coming months.”

RBS is due to report its half-year results tomorrow.