RBS is undertaking a strategic review with the aim of refocusing the group on those businesses that have a clear competitive advantage, credible future growth opportunities from strong customer franchises and which generate appropriate risk-adjusted returns.
After careful consideration, the Board of RBS believes RBS Insurance meets these criteria and that it is in the best interests of shareholders for the group to retain the business.
Stephen Hester, group chief executive, says: “Given RBS’ broader considerations, it was important to test the market for this business which has demonstrated that a sale on terms currently available would destroy value for RBS’ shareholders.
“RBS Insurance benefits from a leading market position, strong cash generation and low capital requirements. 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.”