LONDON -(Dow Jones)- A U.S. banking unit of the Royal Bank of Scotland Group PLC (NYSE:RBS) (RBS) plans to open 57 supermarket bank branches in New York state this year and next year, the bank said after announcing the sale of 18 bank branches Wednesday.

"We will continue to expand our core franchise in larger metropolitan portions of New York state, which continues to grow," Dana Drago, Vice-Chairman for Retail and Business Banking at Citizens Financial Group told Dow Jones Newswires Wednesday.

Drago said Citizens plans to open 16 new in-store banking services branches in Stop & Shop supermarkets in New York this year and 41 next year.

These would be "principally in the lower Hudson Valley, Rockland and Westchester counties, and on Long Island," Drago said.

The statement comes after RBS said earlier Wednesday that Citizens sold 18 small rural branches in upstate New York with gross assets of $631 million to Community Bank System Inc. (NYSE:CBU) (CBU).

RBS didn't say what the selling price is, nor the book value and gain from the disposal.

In April, RBS announced a GBP12 billion rights issue to shore up its balance sheet amid the ongoing credit crunch.

It also said it has identified RBS Insurance and other smaller assets for " whole or partial" disposal, saying they are not core to the bank's business.

Company Web sites: www.rbs.com

www.citizensbank.com

-By Vladimir Guevarra, Dow Jones Newswires; +44 (0) 20 7842 9486, vladimir.guevarra@dowjones.com

    (END) Dow Jones Newswires   06-25-08 1042   Copyright (c) 2008 Dow Jones & Company, Inc.