Royal Bank of Scotland Still Shopping in the Eastern U.S

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Royal Bank of Scotland Group PLC has been among the world's busiest bank acquirers in recent years, putting together major deals on both sides of the Atlantic. The Edinburgh-based company may be slowing down in Europe -- George Mathewson, its chairman, says further major acquisitions there are not part of its plan.

In the United States, it is a different story.

"There are too many banks in the United States, and there will be fewer," Mr. Mathewson said Wednesday. Royal Bank of Scotland will be one of the buyers, he said.

Last year Royal Bank's Citizens Financial Group bought Mellon Financial Corp.'s regional retail banking franchise in the northeastern United States. Before that the company had been biding its time, believing that valuations in America were too rich for its taste.

"Too-high prices were paid, and promises were made that couldn't be kept because of cost-cutting," Mr. Mathewson said. "Things are more sane now."

High prices were not the only thing on Royal Bank's mind. It was busy integrating National Westminster Bank PLC, which it bought in 2000 after a winning a battle with Bank of Scotland.

"It was such a remarkable transaction," Mr. Mathewson said in an interview after a speech at the Bank Administration Institute's Retail Delivery Conference and Expo here. "It was two people competing to buy something two or three times their size, and when you look like you are winning, your share price goes down."

It took a long time for the market to understand the wisdom of the purchase, he said.

That major integration project has been finished -- ahead of schedule -- and there are new items on the agenda, including expanding its U.S. franchise and raising its profile here. "We would like to see ourselves better known in the U.S.," he said. "We would like to be recognized as an important bank by investors."

Mr. Mathewson's sensitivity to the attention of U.S. investors is understandable. Late last month the company filed a shelf-registration statement with the Securities and Exchange Commission under which it may sell up to $7.25 billion of debt securities, preference shares, and trust-preferred securities.

Citizens has been careful to acquire only in markets adjacent to or overlapping its own. …