Bank presses ahead with disposal of Direct Line and NIG following part nationalisation.
The sale of Direct Line, Churchill and NIG will go ahead despite the effective nationalisation of parent company RBS today.
A spokesman confirmed that the bank, which has received a £20bn lifeline from the government, was in advanced discussions about the sale of its insurance division, comprising some of the UK’s best known insurance brands.
The spokesman said: “We are in advanced stages of discussions with a couple of interested parties.”
The spokesman refused to provide further details. American insurer Allstate has been repeatedly linked with RBSI in media speculation. While RBS initially put a £7bn price tag on its insurance business when it put it up for sale in May, it is thought that it may now have to accept less.
RBS received the taxpayer’s support today following a disastrous fall in its share price. The government will take a majority stake in the bank, buying £5bn of preference shares and underwriting £15bn of ordinary shares. RBS chief executive Fred Goodwin has resigned.
A further £17bn of public money will be injected into HBOS and Lloyds TSB. Barclays has announced plans to raise £6.5bn without government help. The package comes with strings attached. Bank executives will not receive bonuses this year, and the banks involved have agreed to continue to offer credit to homeowners and small businesses.
