RBS to net $295 million gain from Spanish sale

I / London May 1, 2009, 10:04 IST

Royal Bank of Scotland Group PLC said today that it has sold its half share in a Spanish insurance company to its joint venture partner, Bankinter SA, a move that is expected to net the ailing bank around $300 million.      

RBS said the sale of its stake in Linea Directa Aseguradora (Direct Line Insurance) for $563 million was expected to yield a net gain of $295 million.      

When it announced a British record corporate loss of 24.1 billion pounds on February 26, RBS said it aimed to wind down or dispose of 20% of its assets within five years.      

The British government spent around 20 billion pounds to rescue the bank, and now holds 70.3% of its shares.      

RBS said Linea operated as a largely independent Spanish insurance company with limited connection to the group.      

Formed in 1995, it is the sixth-largest motor insurance provider in Spain, and has expanded into insuring motorcycles, fleets and households.