Mellon to Sell Retail Bank Units

Mellon Financial Corp. said it’s selling its retail banking business to Citizens Financial Group, the U.S. arm of Royal Bank of Scotland Group, for $2.1 billion in cash.

The sale will return Mellon to its roots as a private bank, managing money for individuals and corporations, Chief Executive Martin G. McGuinn said.

The deal, which includes operations in Pennsylvania, Delaware, New Jersey and Virginia with total assets of $16.4 billion, makes Citizens one of the nation’s 20 largest commercial banks, with total assets of $49 billion.

Mellon, which has about $2.8 trillion in assets under management, administration or custody for individual and institutional investors, has in recent months agreed to sell several units.

The company announced second-quarter earnings that were restated to reflect the sale of the retail unit. The company said operating profit rose 40 cents a share, or 2%, to $191 million. The results don’t compare with analysts’ estimate of 55 cents because of the restatement.

On the NYSE, Mellon shares fell $2.03 to close at $40.18.