Posted Sun, 01/11/2009 - 14:54
Insurance News - Sunday 1st November 2009
Insurance industry hovering over Royal Bank of Scotland |
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Sunday 1st November 2009
After last week's announcement that the EU commission will look to force Royal Bank of Scotland to dispose of its insurance interests, namely Churchill, Direct Line and Green Flag, many in the insurance industry are now rubbing their hands with glee waiting for the bargain of a lifetime. Despite the fact that the three well-known brands in the UK will probably go for around £5 billion to £6 billion there are many who believe in the medium to longer term this will be a bargain. The fact that Royal Bank of Scotland is also a "forced seller" will obviously impact upon any potential price although there will be significant interest and significant competition as and when the operations are put up for sale. The funds raised will be reinvested into the core business and used to shore up the balance sheet which has undergone a significant change since the recession began. More and more we are seen UK banks forced to refocus on their core activities and this would appear to be a particular strategy which the UK regulators are keen to encourage. The fact is that UK financial companies have become far too strong in far too many sectors and this power needs to be reduced.
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Comments
by Anonymous - 1 Nov 2009 - 20:49
Since the world economy is still in fragile condition and practically the uk, I think what the EU is imposing on RBS is harsh, what's the EU position towards Barclays fund raising from wealthy Middle Eastern countries, don’t those entities represent some sort of foreign "government-aid". and of virgin decided/allowed to buy rbs and Lloyds branches, I think that will have short term advantage to the uk client but will certainly turn out to be catastrophic in the long term for the consumers since virgin operates into so many sectors of the uk and even world economy such as in telecom, transportation, media and other and that will lead certainly to monopolise the economies and will shed out other competitors such as RBS and Lloyds who already are in a weak position.
by Anonymous - 1 Nov 2009 - 22:37
The EC and Government regulators stood by as RBS bought company after company, including Churchill 5 or 6 years ago, and ABN. The also patched together Lloyds and HBOS. Now they are asset stripping whilst the real problem remains, the Casino and Bonus culture which disproportionately rewards certain financial activities, many of which are barely legal. (Indeed selling sub-prime as AA rated investments surely is fraudulant). No wonder people sometimes need to protests against unfettered capitolism.
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