RBS sells stake in UK insurer Direct Line

Royal Bank of Scotland (RBS) has sold a further stake in UK insurer Direct Line as part of the company's move to streamline business.

Royal Bank of Scotland (RBS) has sold a further stake in UK insurer Direct Line as part of the company's move to streamline business.

The bank disposed an additional 17% of its interest in Direct Line for 201p per share, cutting its holding to a minority and raising gross proceeds of £507m.

It comes after the state-backed lender sold 34.7% of Direct Line at its stock market debut last October.

RBS now holds 48.5% of the issued ordinary share capital.

European authorities have told RBS to sell at least half of Direct Line by the end of the year in an effort to clean up the bank's structure and focus on core domestic banking.

"We are pleased with the performance of Direct Line Group since the initial public offering in October 2012," said RBS Group Finance Director, Bruce Van Saun.

"This sale is part of our ongoing delivery against European Union commitments and will take our ownership below the 50% level. We continue to execute well against the key milestones in our recovery plan."

Prime Minister David Cameron last month urged the bank to speed up its revamp and the government is keen to start selling shares.

RBS will also be auctioning off 300 of its branches as the bank needs to pay back £45.5bn of taxpayers' money it used to bail itself out during the 2008 banking crisis.

The bank has until the end of the year but said it was likely to ask the European Commission for permission to extend its deadline.

RD

Recommended

Share tips of the week – 30 September
Share tips

Share tips of the week – 30 September

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
30 Sep 2022
The best British tech stocks from a thriving sector
Share tips

The best British tech stocks from a thriving sector

Move over, Silicon Valley. Over the past two decades the UK has become one of the main global hubs for tech start-ups. Matthew Partridge explains why,…
29 Sep 2022
These 3 top value stocks offer
Share tips

These 3 top value stocks offer

Professional investor Adam Rackley of Cape Wrath Capital highlights three overlooked value stocks to buy.
29 Sep 2022
Three top-notch Asian stocks to buy
Share tips

Three top-notch Asian stocks to buy

Professional investors Adrian Lim and Pruksa Iamthongthong, managers of the Asia Dragon Trust, pick three of their favourite Asian stocks to buy now.
23 Sep 2022

Most Popular

Why everyone is over-reacting to the mini-Budget
Budget

Why everyone is over-reacting to the mini-Budget

Most analyses of the chancellor’s mini-Budget speech have failed to grasp its purpose and significance, says Max King
29 Sep 2022
How the end of cheap money could spark a house price crash
House prices

How the end of cheap money could spark a house price crash

Rock bottom interest rates drove property prices to unaffordable levels. But with rates set to climb and cheap money off the table, we could see house…
28 Sep 2022
Why UK firms should start buying French companies
UK stockmarkets

Why UK firms should start buying French companies

The French are on a buying spree, snapping up British companies. We should turn the tables, says Matthew Lynn, and start buying French companies. Here…
28 Sep 2022