RBS Seeks Advice from Morgan Stanley and Goldman Sachs as to a Float or Sell of their Insurance Division



Should RBS seek to sell off its insurance division billionaire Warren Buffett might be a potential buyer.

Should RBS seek to sell off its insurance division billionaire Warren Buffett might be a potential buyer.

The Royal Bank of Scotland (RBS) has decided to either sell off or float its insurance division. A team has been appointed to oversee the process and it is more likely to be a floatation of the business unit on the London Stock Exchange (LSE) than a sale. Both Morgan Stanely and Goldman Sachs are taking on the review of the strategy. The experts believe the time period is expected to be two or three years and a float on the LSE by 2013.

The insurance arm of RBS includes well-known names such as Direct Line, Churchill, Green Flag, and Privilege. A sale of the assets would stimulate quite a bit of interest according to experts and is valued at GBP 4 billion to GBP 5 billion. US billionaire Warren Buffett has expressed interest in the sale in the past. He had been considered to be the front runner for buying when in the Spring of 2008 RBS first ran into financial trouble and tried to sell the insurance division. The auction was stopped just weeks prior due to the collapse of Bear Stearns.

RBS was one of the banks bailed out by the taxpayer during the financial crisis. In an attempt to payback funds and steady the banks future as required by the government, RBS has sold off considerable assets already.

Three hundred UK branches were sold by RBS for GBP 4 billion. Spain’s Santander bought the majority of the branches. RBS sold an 80 per cent stake holding in the WorldPay payment processing company. They also sold off much of its Sempra joint venture commodities holdings.

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