RBS to press ahead with Direct Line sale

14 September 2012

Royal Bank of Scotland (RBS) will press ahead with plans to sell its Direct Line insurance business in the near future.

Regulators in the European Union ordered the major British financier to get rid of this division of its business by the end of 2013 under the terms of it benefitting from state aid worth £45 billion ($72 billion) in the aftermath of the 2008 global financial crisis.

This move will involve RBS floating Direct Line - which is the largest insurance firm in the UK - on the stock market and analysts believe the initial public offering (IPO) will value the insurance firm at around £3 billion.

Such a sale would represent the biggest single offering seen in London so far in 2012 and Bruce Van Saun, group finance director of RBS, said he is "pleased" that the floatation is going ahead.

"We believe [Direct Line] has a strong future as a standalone insurance group continuing to serve its customers well while delivering attractive returns to investors," he added.

By Asim Shah

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