Citizens Financial Group, the US subsidiary of Royal Bank of Scotland, filed papers late on Monday to sell shares in an initial public offering in New York.
RBS has been looking to divest non-core assets and focus on domestic business since it was bailed out by the UK Government six years ago.
RBS said earlier this year it planned to initially sell up to 25 per cent of Citizens in an IPO and eventually divest the whole of the unit.
The divestment could take the form of an IPO or a sale. Citizens sold branches in Chicago earlier this year.
Citizens' regulatory filing to sell shares is for about $100 million but that is seen as just a “placeholder” for registration purposes and the amount raised is expected to rise substantially.
Analysts have valued the whole of Citizens at between $9 billion and $15 billion in the past.
Citizens said in the filing it would not receive any proceeds from the sale of shares.
“The selling stockholders will receive all of the proceeds from the sale of shares of our common stock,” said the filing.
The proposed sale of shares had become problematic in March when Citizens did not pass a stress test set by the Federal Reserve.
So in a statement late on Monday RBS chief executive Ross McEwan said the IPO filing was a “milestone” that keeps RBS on track for an IPO of Citizens late in 2014.