RBS sells Channel Islands leasing unit for £150m

Friday 05 January 2018

The Royal Bank of Scotland (RBS) has sold its Jersey and Guernsey operations from its asset financing group Lombard to specialist lenders Investec and Shawbrook Bank for £150million.

The move follows the introduction of new ring-fencing rules set to split apart Britain’s biggest lenders, which will come into force in 2019.

The rationale behind the rules is that taxpayers will be better protected in the event of another financial crash by separating banks’ retail operations from riskier businesses such as investment banking.

Lombard, which set up its Jersey branch in 1972, was one of Britain’s biggest asset finance providers, lending £6billion in 2015. From St Andrew’s Place, the provider helped businesses finance capital projects spanning machinery, vehicles and aircraft.

Pictured: St Andrew's Place, where the Jersey branch was based. (Google Maps)

But its Channel Islands operations stopped taking on new business in summer 2017 as a result of the new ring-fencing rules. They were then put up for sale.

The move resulted in seven job losses in Jersey, and others across the other three offshore jurisdictions – Guernsey, Gibraltar and the Isle of Man.

News of the sale was first reported by Sky News. This marks one of the first cases of a major bank selling off large-scale business due to the new ring-fencing rules. It also represents a significant downsizing measure for RBS, which is more than 70% owned by British taxpayers.