13:57 15 September 2012
The Royal Bank of Scotland (RBS) has confirmed plans to sell off its Direct Line Insurance business and turn it into a separate public company. Estimates suggest the company is worth £3bn.
RBS is majority owned by the taxpaying public.
The company was ordered by European Union regulators to part with Direct Line after RBS received £45bn in state aid during the recent financial crash.
By 2014 it must have no interest in the business whatsoever. Roughly a quarter of the Direct Line Group will be offered in the initial share (which will be the biggest seen in London for a year) with more to follow.
Direct Line is one of the nation's largest companies. Founded a quarter of a century ago, it owns other insurance providers such as Churchill and Privilege amounting to more than four million policy holders according to the BBC.
As well as the sale, the company is looking to make savings of £100m a year. To do that, jobs will be cut - some 900 out of its 15,000 will be dropped in restructuring plans.
RBS's finance director, Bruce Van Saun, told the BBC: "We believe it has a strong future as a standalone insurance group continuing to serve its customers well, while delivering attractive returns to investors."
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