(MENAFN- AFP) Shares in Citizens Financial Group rose sharply in their first day of trade in New York on Wednesday, after parent Royal Bank of Scotland lowered the IPO price.
After the second-largest initial public offering of the year, Citizens shares closed at $23.08, up 7.4 percent from its $21.50 per share IPO price.
Trading on the New York Stock Exchange under the ticker "CFG", the shares were performing better than anticipated after a bumpy rollout.
Late Tuesday, Royal Bank of Scotland, cut its planned $23-25 IPO price for 140 million common shares to $21.50 due to lackluster demand from investors.
The offer raised about $3.0 billion, valuing the Providence, Rhode Island-based bank at $12 billion.
RBS has set a 30-day offer of about 21 million additional shares at the IPO price in case of strong demand. If the option is fully executed, RBS would hold 71.3 percent of the subsidiary's common stock.
At $3.0 billion, the Citizens IPO is the second-largest in the United States in the year to date after Alibaba's $25.0 billion offering last Thursday, according to Dealogic.
In addition, the deal ranks the third-largest bank IPO from a US issuer on record, behind CIT Group in 2002 at $4.9 billion and Goldman Sachs in 1999 at $3.7 billion, Dealogic said.
Citizens, one of the nation's oldest banks, tracing its roots to 1828, is the 13th largest US bank by assets. It had $130.3 billion in assets as of June 30.
RBS plans to completely sell off Citizens by 2016 as part of vast restructuring program.
"This IPO represents a key step on the path to full divestment," said RBS chief executive Ross McEwan in a statement.
"Selling Citizens will significantly improve our capital position and help us to create a strong and secure bank that can continue to fully support the needs of its customers."
The Royal Bank of Scotland is 81 percent owned by the British state after it was rescued with £45.5 billion ($74.4 billion) of public money during the global financial crisis, in the world's biggest bank bailout.
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