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Citizens Bank, which ranks No. 4 in deposits in the Western New York market, is in the midst of an intriguing banking story that stretches across the Atlantic.

The Sunday Times of London, citing unnamed sources, reported that Toronto-Dominion Bank might be interested in buying Citizens from the Royal Bank of Scotland, a deal with an estimated value of about $13 billion.

If the megadeal came to fruition, it would mark not only a change for Citizens Bank customers, but would extend TD’s presence into the Western New York market, among other regions where Citizens has branches but TD does not.

In the Federal Deposit Insurance Corp.’s most recent data, TD Bank ranked No. 8 in U.S. deposits, and RBS Citizens was No. 18. A combination of the two would rank No. 5, behind Citibank, not accounting for any divestitures federal regulators would likely require for such a deal.

Toronto-based TD declined to weigh in on the likelihood of an acquisition. “We don’t comment on rumors or speculation,” said Ali Duncan Martin, a spokeswoman. The Royal Bank of Scotland has also declined to comment on the report.

TD has a prominent U.S. presence, with branches in 15 states and the District of Columbia. And while TD has branches in New York State, they are concentrated in the eastern and downstate portions of the state.

Rhode Island-based Citizens has branches in 12 states in the Northeast, Midwest, mid-Atlantic and New England. More than 40 of its New York branches are in Western New York, where Citizens has 4.8 percent of the deposit market share, according to FDIC data from the end of June. Acquiring Citizens would enable TD to extend its branch network westward, into the Midwest.

Even if an acquisition by TD does not happen, Citizens is on track for change. Last February, the Royal Bank of Scotland confirmed it planned to hold an initial public offering for Citizens within two years. RBS said it would aim to sell about 25 percent of Citizens via the partial IPO. Citizens Financial’s new chief executive officer, Bruce Van Saun, has said he would like the partial IPO to happen sooner, possibly in the fourth quarter of 2014.

The British government owns 82 percent of RBS, the result of a rescue during the 2008 financial crisis.

email: mglynn@buffnews.com