Citizens Bank parent taken over by British government

Citizens Bank of Pennsylvania's European parent, Royal Bank of Scotland Group, may be taken over by the British government in exchange for $34 billion in much-needed capital.

Citizens has 128 branches in Western Pennsylvania, second behind National City's 158, and holds more than 8 percent of this area's deposits, making it the region's fourth largest bank. It arrived in Pennsylvania in 2001 by acquiring the retail banking business of Mellon Bank.

The bailout plan would give the British government up to 60 percent ownership of Royal Bank of Scotland, known as RBS, in what would be the largest bank nationalization in Europe. The government also replaced RBS chief executive Fred Goodwin.

Based in Edinburgh, Scotland, RBS is the second-largest bank in the U.K. The bank is suffering from the housing slump in Britain and in the United States. RBS had taken huge write-downs related to subprime loans earlier this year and booked its first half-year loss in 40 years.

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