The Royal Bank of Scotland is reportedly set to keep hold of its insurance unit having successfully raised capital by selling risky loans . The bank has been heavily affected by the credit crunch due to the presence of bad loans on its portfolio and its large exposure to the subprime market. Having posted a loss of £691 million for the first half of this year, the bank has been under pressure to raise funds, and was up for sale in April as RBS announced a £12 billion rights issue in an attempt to boost its balance sheet.
The bank has also been trying to sell its insurance division, including reputable insurers such as Direct Line and Churchill, for a total value of £7 billion. However, having already sold its Angel Trains unit and its half of Tesco Personal Finance, the latest boost of cash means the bank won’t have to sell its profitable insurance division, according to the Sunday Times. The RBS Insurance unit has over 21 million policies on its portfolio, and saw operating profits jump by £258 million during the first half of this year to £403 million.
Royal Bank of Scotland May Not Need to Sell Insurance Unit
Royal Bank of Scotland May Not Need to Sell Insurance Unit
Tue, 19 Aug 2008
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