CITIZENS FINANCIAL, the American bank which is 23.5 per cent owned by Bank of Ireland, has continued its expansion in the New England area, with the acquisition of Grove Bank in Boston for $87 million (£54 million). Royal Bank of Scotland holds the majority 76.5 per cent stake in Citizens Financial.

The price being paid by Citizens represents 1.8 times Grove's book value and is a lower multiple of book value than the average in American banking takeovers.

Grove has total assets of $599 million and has seven branches in metropolitan Boston. As part of the deal, Citizens is also acquiring Greater Boston Bank, which is currently in the process of being acquired by Boston. Greater Boston has three branches in Boston and has total assets of $167 million.

Following the takeover. Citizens will have 78 branches in Massachusetts with assets of $5 billion. The acquisition will boost Citizens' assets to nearly $16 billion, making it the third biggest bank in New England and among the top 50 in the US in terms of asset size.

This is the second acquisition by Citizens since it was created in December 1995 through the merger of Bank of Ireland's First NH Bank and Royal Bank of Scotland's operations in New England which already traded under the name Citizens Financial. At the time of the acquisition, the merged group had total assets of $14 billion and 220 branches in New Hampshire, Rhode Island, Massachusetts and Connecticut.

In June, Citizens paid £35 million for Farmers and Mechanics Bank, which added 12 branches in Connecticut and assets of $540 million. As with Grove Bank, the Farmers and Mechanics Bank acquisition was funded through Citizens' own resources.

In August, Citizens reported pre tax profits of 5176.3 million for the nine months to the end of June, compared to $122.7 million the previous year. The results included a once off charge of 534.5 million relating to the merger with First NH.