Shares of Citizens Financial Group, the US unit of Royal Bank of Scotland Group, rose as much as 8% in their market debut, valuing the lender at about $13 billion in the biggest US bank IPO since the financial crisis.
The offering, which raised $3.01 billion for RBS, is also the second biggest in the US this year after Alibaba Group's $25 billion IPO last week.
Citizens' shares closed up 7.3% at $23.08, underscoring tepid appetite for offerings by financial firms in an otherwise successful US IPO market.
Alibaba's stock rose 38% on its first day of trade.
RBS, which is 80% owned by the British government, had originally planned to sell the shares at between $23 and $25, but ended up selling them for $21.50 each.
The bank was forced to cut the price due to investor uncertainty over Citizens' ability to meet profitability targets, analysts said.
RBS, whose stake in the 186-year-old Rhode Island-based bank will drop to 75% after the IPO, has said it intends to sell all of its stake in Citizens by 2016.
The UK bank is already planning to sell another 25% in Citizens by March, once the 180-day lock-up period expires, the Financial Times reported, citing a person familiar with the matter.
RBS, which owns Ulster Bank here, was saved from collapse in 2008 by a £45 billion bailout. Since then, it has been shedding assets to focus on lending to UK households and small businesses.
Analysts have said RBS's core capital adequacy ratio could be boosted by 2-3 percentage points once it sells at least half of Citizens, probably in the first half of 2015.
Citizens, which was bought by RBS in 1988, provides retail and commercial banking services to about 5 million customers and ranks as the 13th biggest retail bank in the US, with about $130 billion in assets.
It had 1,200 branches in 11 states in the New England, Mid-Atlantic and Midwest regions at the end of June and made a net profit of $479m in the six months to the end of June, on revenue of $2.6 billion.
