RBS abandons RBSI sale
The Sunday Times has reported that the Royal Bank of Scotland (RBS) plans to withdraw its insurance business from sale by auction.
According to the report, RBS has managed to raise almost £6 billion from the sale of risky loans, and so is able to call off the auction for RBSI, whose brands include Churchill and Direct Line.
Instead of selling RBSI to the highest bidder, RBS will now accept no less than the £7 billion price tag that was originally placed on the insurance business.
It is believed that the only serious competitor left in the bidding race, America-based insurer Allstate, is only willing to pay around £6 billion for RBSI, meaning that RBS has effectively withdrawn the business from sale.
Unless past bidders can be tempted back into the bidding race, the auction is likely to be abandoned.
In addition to selling its risky loans, RBS has also recently raised funds by selling its 50% stake in Tesco Personal Finance for close to £1 billion.
Earlier this month, RBS announced a £691 million loss for the first half of 2008.
Category: Insurance News, Royal Bank of Scotland News
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