RBS confirms Direct Line insurance sell-off

<p>RBS has confirmed it will be selling off Direct Line.</p>

Royal Bank of Scotland (RBS) has confirmed it will be selling off its Direct Line Insurance business and turning it into a separate public company.

The financial institution's share price has soared on the London Stock Exchange as a result of this news.

Early estimates indicate Direct Line – which is the biggest cover provider in the country – could have an initial public offering of £3 billion.

Some 25 per cent of the Direct Line Group will be offered in the first share sale, with more expected to follow.

RBS is majority-owned by the taxpayer and was ordered to sell the insurance business by European Union authorities as a condition of the major British bank receiving £45 billion in state aid following the 2008 financial crisis.

At 10:50 BST today (September 14th), RBS shares climbed 3.5 per cent to an index value of 283.70p.

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