The Royal Bank of Scotland has revealed that it has sold 20% of its stake in Direct Line, generating £630m, in a bid to eventually fully offload its ownership slice of Britain's biggest motor insurer.
The 83% state-owned bank, which was dramatically rescued by the British taxpayer in 2008, is under orders from the European Union (EU) to sell all of its Direct Line shares by the end of 2014.
"This successful sale keeps RBS fully on track to meet its obligation to divest its stake in Direct Line by the end of 2014," said RBS's Finance Director Bruce Van Saun.
RBS said that the money from the sale will be used for "general corporate purposes".
The bank confirmed that 300 million ordinary shares were sold at a price of £2.10 per share as part of the penalty that European regulators imposed on RBS as part of its 2008 rescue.
After the stake sale, RBS holds 427.4 million ordinary shares in Direct Line that represents 28.5% of the issued ordinary share capital in the company.
In October 2012 RBS sold just over a third of its interest when Direct Line was floated and slashed its stake to just below 50% with a share sales in March 2013.
In March 2013 RBS also agreed not to sale any more shares until September 2013
The British government has taken responsibility for recuperating the taxpayer money that was used to nationalise it by selling off assets from RBS piece-by-piece.
RBS said it does not plan to sell any more shares in Direct Line for 90 days. Direct Line is also one of the UK's biggest home and general insurers.