Bank confirms it will keep insurance division

The Royal Bank of Scotland has officially ended the sale of its insurance arm, RBSI.

In a statement, RBS said it was "no longer in discussions with interested parties regarding a possible disposal of the business."

Private equity firms have recently been heavily linked with an approach for the bank’s insurance assets, which include Direct Line and Churchill.

The bank put the assets up for sale last year with a price tag in the region of £6bn to £7bn.

Former Norwich Union chief executive Patrick Snowball along with private equity firms BC Partners and Apollo Management were interested in acquiring the business, but the consortium's bid was rejected. It also failed to agree terms with private equity group CVC.

Stephen Hester, the bank's new group chief executive, ordered a strategic review of RBS in November in an attempt to raise capital. He said a sale "would destroy value for RBS' shareholders".

"RBS Insurance benefits from a leading market position, strong cash generation and low capital requirements," he said. "It does not absorb funding or risk-weighted assets and is not closely connected to the credit cycle. It is an impressive, well-run business with great people and excellent customer franchises. It can play an important role as we return the RBS Group to standalone strength."

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