Royal Bank of Scotland Group (LON:RBS) has inked a deal to offload the offshore operations of its Lombard leasing unit, Sky News has revealed. The move comes as the bailed-out lender prepares for new rules requiring UK lenders to separate their retail banking from riskier operations.
RBS’ share price has slipped marginally lower in today’s trading, having given up 0.18 percent to 276.80p as of 13:41 GMT. The stock is underperforming the broader UK market, with the benchmark FTSE 100 index having climbed marginally higher and currently standing 0.08 percent up at 7,654.18 points. The group’s shares have added just under a fifth to their value over the past year, as compared with an over seven-percent rise in the Footsie.
RBS offloads leasing unit
Sky News reported today that RBS had agreed to dispose of the Channel Islands operations of its Lombard leasing unit for about £150 million. The buyers are specialist business lenders Investec and Shawbrook which have agreed to divide the Jersey and Guernsey assets between them.
A source close to the deal indicated to the newswire that Investec will also take on the Lombard loans in the Isle of Man and Gibraltar.
The disposal comes with RBS continuing its retreat from non-core operations in the wake of its state-funded bailout during the financial crisis.
The sale also comes as UK lenders prepare for new ring-fencing rules, due to come into force next year, requiring them to separate their retail operations from riskier investment banking. Insiders explained to Sky News that the offshore Lombard activities were prohibited from being housed within RBS’ new ring-fenced bank, while it was not viable for them to sit in its non-ring-fenced division.