Royal Bank of Scotland set to be tested on insurance division sale
Despite rumours at the Royal Bank of Scotland, which is now majority owned by the UK government, is looking to cancel the ongoing sale of its £7 billion insurance division there are suggestions of a late entry into the sales process. Private equity giant Apollo Management and BC Partners are rumoured to be set to mount a late joint bid for the £7 billion division which may test the nerve of the Royal Bank of Scotland management.
Despite the fact that the operation has been on the market for nearly a year, new chief executive Stephen Hester is believed to be keen to retain the operation as it contributes a large bulk of the group's £1 billion a year profits. The operation includes such household names as Churchill Insurance and Direct Line and while the market is tough at the moment these are very strong brand names for the future.
Despite the government led bailout of the Royal Bank of Scotland it has been suggested that the £7 billion which could be raised would be used to increase the financial strength of the group at a time when many experts are predicting a "bank bailout part two".
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