Earlier in the week, Dealscape speculated
that should troubled U.K. bank the Royal Bank of Scotland Group plc sell its
U.S. retail banking business, Citizens Financial Group, Capital One
Financial Corp. would be a natural fit. McLean, Va.-based Capital One
was flush with $3.5 billion from a U.S. Treasury capital injection via
the Troubled Asset Relief Plan, and additional deposits could help the
firm ride out the recession, which will undoubtedly batter its credit
card business. A Citizens purchase also made sense geographically.
The
logic was half right. Capital One was on the prowl, and it just opted for a
smaller deal in the form of Maryland-based Chevy Chase Bank FSB.
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At $520 million for $11 billion in deposits, Chevy Chase is not
only smaller than Citizens with its $97 billion in deposits, but a more
certain transaction, since Citizens technically isn't even on the
block. The Providence, R.I.-based bank is reportedly one of the
healthier assets in RBS' portfolio, with limited exposure to bad
mortgages. However, RBS chief Stephen Hester and other executives have
been coy about Citizens' future, saying that everything is on the
table, but also calling Citizens an important asset. Nonetheless, Wall
Street analysts are speculating it will go on the block, and could fetch $14 billion, which may have been too rich for Capital One's wallet.
A Citizens deal could still be in the cards, but clearly Capital One is out of the running. - Matthew Wurtzel
See earlier post about Citizens from Dealscape
See related story about Citizens from the Pittsburgh Tribune-Review
Matthew Wurtzel is the editor of Dealscape.
