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

Broker safety – your questions answered
Investment strategy

Broker safety – your questions answered

Cris Sholto Heaton answers more of your questions about the safety of stockbroker accounts
25 Mar 2020
How demographics affects stock valuations
Investment strategy

How demographics affects stock valuations

New research suggests that stock and bond valuations are driven by the age of the population – at least in the US.
24 Feb 2020
Do you own shares in Sirius Minerals? Here’s what you need to do now
Stocks and shares

Do you own shares in Sirius Minerals? Here’s what you need to do now

Mining giant Anglo American has proposed a cash takeover of Yorkshire-based minnow Sirius Minerals. Unhappy shareholders must decide whether to accept…
20 Feb 2020
Why investors should be “cautiously bullish” for 2020
Stockmarkets

Why investors should be “cautiously bullish” for 2020

Analysts have been out in force making rosy predictions for stockmarkets in 2020, but while there is certainly a case for optimism, investors should r…
17 Jan 2020

Most Popular

The rising dollar is proving bad news for most other assets – will it last?
Investment strategy

The rising dollar is proving bad news for most other assets – will it last?

Precious metals, stocks and pretty much every other asset has taken a tumble as the US dollar strengthens. Dominic Frisby looks at how long this trend…
23 Sep 2020
The electric-car bubble could get an awful lot bigger from here
Renewables

The electric-car bubble could get an awful lot bigger from here

The switch to electric cars is driving a huge investment bubble. But that’s not necessarily a bad thing, says John Stepek. Fortunes will be made and l…
24 Sep 2020
Why you should stuff your end-of-pandemic portfolio with Chinese stocks
China stockmarkets

Why you should stuff your end-of-pandemic portfolio with Chinese stocks

For an end-of-pandemic portfolio, you need assets that can cope with today’s volatility. And that, says Merryn Somerset Webb, means Chinese stocks.
14 Sep 2020