Citizens Bank parent to be part of British rescue

Citizens Bank's parent, Royal Bank of Scotland, yesterday said it would participate in the British government's sweeping new program to bolster that nation's banking system.

The dramatic offering by the government includes providing banks and other lenders with as much as 50 billion pounds, or about $87 billion, in capital in exchange for preferred shares in the companies, guaranteeing as much as 250 billion pounds in new bank debt, and extending other lending.

Royal Bank's chief executive, Fred Goodwin, yesterday said the bank intends to "participate in certain of the measures" the government announced.

Citizens, part of Citizens Financial Group, of Providence, referred questions to Royal Bank, where a spokeswoman declined to give details.

One condition of the British government's program is that the banks commit to raising capital. The British Treasury said eight lenders, including the Royal, would participate in the government's recapitalization.

Citizens is the second-largest bank in New England, with 259 Massachusetts branches. On Tuesday, prior to the British government's announcement, Standard & Poor's downgraded the Royal and subsidiaries including Citizens one notch, because the Royal's "financial profile may continue to weaken."

Citizens has said it is positioned to weather the financial crisis. A spokeswoman said its ratio of capital to total assets is a relatively high 9.29 percent.

Ross Kerber can be reached at kerber@globe.com.