RBS 'plans to sell insurance arm' - BBC News

Britain's 2nd biggest bank, Royal Depository Financial Institution of Scotland, is considering merchandising its coverage houses Direct Line and Churchill, a study suggests.

The concerns could raise up to £5bn for RBS, the Lord'S Day Telegraph said.

The study come ups as rubidiums executive directors ran into to discourse programs to inquire stockholders for up to £12bn of other cash.

The board is put to unveil the program to raise money from existing investors on Tuesday. It will be the greatest rights issue in United Kingdom corporate history.

RBS, desires to shore up its fiscal place amid the planetary recognition crunch, declined to notice on the study that it was to sell its coverage arm.

However main executive director Sir Fred Goodwin is understood to be acute to maintain the businesses.

'Prudent measure'

Insurance giants AIG, Allianz, Axa and Generali have got made "preliminary enquiries" about snapping up RBS's coverage business, the Lord'S Day Telegraph said.

WHAT IS A rights ISSUE?

Companies issue other shares to raise money

They are offered to existent shareholders, usually at a terms reduction to the current share price

Shares are offered in proportionality to existent holdings, so if you have 10% of the old shares you are offered 10% of the new ones

The rights issue is thought to be a prudent measurement to supply a working capital shock absorber for the amount of hazard on its balance sheet after rubidiums played a prima function in last year's coup d'etat of the Dutch depository financial institution ABN Amro.

The Lord'S Day Telegraph said that Sir Fred held secret negotiation with the Financial Services Authority about the prospect of a rights issue.

Reports propose other Banks - including Barclays and HBOS - have got talked with the City guard dog about similar plans.

The paper added that the heads of other Banks had also met with the caput of the FSA, Hector Sants, over the possibility of going to their stockholders for cash.

Both Barclays and HBOS declined to notice on the report.

However there have been no suggestion that the FSA have tried to coerce any depository financial institution into going to its stockholders to raise cash.

Chancellor Alistair Darling have also said that more than Banks are likely to unveil programs to hike their capitalisation.

RBS, proprietor of NatWest, Ulster Depository Financial Institution and insurance company Direct Line, have not yet commented on its programs to get a rights issue.

It will publish a trading update on Tuesday, ahead of its yearly meeting on Wednesday.

The statement is expected to uncover write-downs of about £5bn as a consequence of the bank's exposure to the recognition markets.