A directive forcing RBS to sell its interest in insurance group Direct Line has led to a £507 million windfall for the taxpayer-owned banking group.
The financial giant, with its HQ in Edinburgh, announced its intention to sell a major stake in the group earlier this week in a move that would reduce its stake in the business below majority level.
RBS, which is more than 80% owned by the taxpayer following a £45 billion bailout, yesterday said it had agreed to sell 252.3m shares in Direct Line for a total of £507m.
The shares were sold at 201p, significantly below the 210.2p price the stock was trading at when the accelerated sale process was made public on Tuesday night.
RBS now holds 726.9m shares in Direct Line which floated in October representing a 48.5% stake.
The sale was forced by European authorities who insisted that RBS divest its interest in Direct Line when the bank received a £45bn bailout following the financial collapse.
Proceeds from the sale will be used for general corporate purposes, RBS said yesterday.
Group finance director Bruce Van Saun said: “We are pleased with the performance of Direct Line Group since the initial public offering in October 2012.
“This sale is part of our ongoing delivery against EU commitments and will take our ownership below the 50% level. We continue to execute well against the key milestones in our recovery plan.”