By Max Colchester 

Royal Bank of Scotland Group PLC on Monday said it planned to sell another chunk of stock in Citizens Financial Group Inc., as the British bank looks to focus on its domestic market.

RBS, which hold a 70.5% stake in Citizens, said it would look to sell a 21% stake in the U.S. lender. It also said it had the option to sell a further 3% stake if there was demand.

The U.K. government-controlled bank will hold a roadshow in the next few days to woo investors and a price for the share sale could be set as early as the end of this week.

RBS isn't expected to remove Citizens from its books until its stake in the lender falls to around 35%, a move that is expected to be complete this year. RBS aims to completely exit Citizens by the end of 2016.

The British bank sold $3 billion of Citizens stock in September but interest was muted amid investor skepticism over the valuation of banking stocks. Shares in Citizens have since rallied from $21.50 to $24.80.

RBS is selling off its stake in Citizens following British political pressure to refocus on U.K. clients. In its annual report the bank took a $4 billion hit on the goodwill value of Citizens as it was forced to write it down to its estimated disposal value.

The Providence, R.I.-based lender operates one of the largest regional banks in the U.S., with branches across the New England, mid-Atlantic and Midwest regions.

Write to Max Colchester at max.colchester@wsj.com

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