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Daily Insurance Industry News
Sunday 21st of January 2018
April 21, 2008

RBS considers sale of Direct Line and Churchill

by Gill Montia

Story link: RBS considers sale of Direct Line and Churchill

RBS considers sale of Direct Line and Churchill RBS considers sale of Direct Line and Churchill

The future of Direct Line and Churchill hang in the balance as their owner, Royal Bank of Scotland (RBS), considers means of raising new capital.

Last week, RBS shareholders were surprised and angered by reports that the bank was planning a deeply discounted rights issue.

Only last month, RBS chief executive, Sir Fred Goodwin, strongly denied suggestions that he was looking to raise new capital in this way.

However, last year’s acquisition of Dutch bank, ABN Amro, on the eve of the credit crisis, appears to have left the bank exposed and needing more cash to shore up its balance sheet.

The sale of Direct Line and Churchill would appease shareholders and would also be in line with the group’s strategy of focusing on its core banking business and the integration of ABN.

According to a report in the Sunday Telegraph, AIG, Allianz, Axa and Generali have made preliminary enquiries about the sale of RBS’s insurance businesses.

Aviva and Zurich Financial Services may also show an interest, however a bid from Aviva could raise competition issues.

 

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