Saturday, February 21, 2015

RBS Goodwill Writeoff

An expected writeoff by the Royal Bank of Scotland (RBS) is further evidence that acquisitions are an inexact science. It is believed that RBS will announce a £4 billion ($6.2 billion) writeoff related to its acquisition of Citizens Financial. The writeoff will almost entirely erase the company's 2014 profit. RBS has already sold 29 percent of Citizens Financial in a public offering, and plans to sell more of the company. RBS purchased Citizens for $130 billion in 1988, but the current market capitalization of Citizens is a much smaller $13.7 billion.