RBSI faces full taxpayer ownership under new bank bailout talk

Royal Bank of Scotland Insurance could become fully owned by taxpayers ahead of its 2013 sale, if according to reports today, the bank needs another Government bailout.

Fears are growing in Whitehall that its parent, RBS bank, may need more cash if European authorities push ahead with a full recapitalisation of the continent’s banks which are suffering from sovereign debt exposures, the FT says today.

A fresh bailout for RBS would probably lead to the Government ramping up its stake from 83% to full takeover.

RBS’s insurance unit owns Direct Line, Churchill, Privilege, affinity specialist UKI and NIG.

The European Commission ordered RBS to divest its insurance arm by 2013.