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.

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