By Dow Jones Business News,
February 26, 2014, 01:05:00 PM EDT
LONDON-- Royal Bank of Scotland Group PLC said Wednesday it will sell its remaining 28.2% stake in Direct Line
Insurance Group PLC in a share placing with institutional investors.
The part state-owned bank, due to post full-year results Thursday, will price its remaining 423.2 million shares in
the FTSE 250-listed insurer in an accelerated bookbuild starting immediately. At current market price the stake is worth
1.14 billion pounds ($1.9 billion).
The sale comes as RBS faces pressure from regulators to bolster its capital position. In January the bank warned that
its full year results would include a GBP3 billion provision and a drop in its capital levels. This included setting
aside an extra GBP1.9 billion to cover litigation and other claims surrounding mortgage-backed securities sold before
the financial crisis. On Thursday the part state-owned bank will outline the results of a strategic review aimed at
cutting billions of pounds in costs and refocusing the business on its U.K. retail and corporate franchise.
Goldman Sachs International, Morgan Stanley Securities Ltd., and UBS Ltd. will run the offering.
RBS sold its majority stake in Direct Line in the insurer's 2012 initial public offering. Direct Line posted a 70%
increase in pretax profit in its own 2013 results earlier Wednesday.
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