Royal Bank of Scotland likely to shelve sale of insurance unit

Royal Bank of Scotland looks increasingly likely to shelve plans to sell its insurance arm and turn instead to smaller deals to strengthen its capital base. RBS announced plans in April to sell RBS Insurance, the largest car insurer in Britain. But trading conditions have deteriorated and the top prospects have pulled out, leaving the bank with the unpalatable prospect of selling an attractive asset at a steep discount to its target price of about £7 billion, or $14 billion. The outcome, bankers and analysts say, could be scrapping the sale, which RBS was never enthused about anyway. "It looks now as if there is a less than a 50 percent chance they will sell the business," said Leigh Goodwin, analyst at Fox-Pitt Kelton. "If they didn't get the right price from Zurich, why would they get a better price from Allstate?" Zurich... [read full story]