ALLIANCE & Leicester Commercial Finance is to wind up its 10,000 vehicle-strong fleet management and contract hire division.
Following a review of its wholesale banking operation, the group has announced it will not be taking on new business in fleet contract hire. Alliance & Leicester has given its introducers and suppliers notice until the end of August and will stop taking on new business from September this year.
However, the group said that there would be 'no impact on existing customer contracts in these sectors'. Martin Evans, director of commercial asset finance at Alliance & Leicester Commercial Finance, said: 'We will continue to run our existing book out over the next three years and afterwards won't be taking on any new business from them.
'However, we will continue to practice wholesale funding for the contract hire and daily rental market. This will continue to grow, it just means we will be more of a back office funder.'
A total of 160 jobs will be lost from the commercial sector over the next 18 months. On the fleet side, 40 jobs will be lost by the end of the year. Evans said that the contract hire sector was chosen because it wasn't as big or profitable as other areas within the business.
He added: 'Other sectors within commercial finance were more attractive, in financial gain and market share, helping give us a competitive advantage.'
Additional sectors to be earmarked under the review include plant and machinery, small business equipment and general sales. As part of the review, Alliance & Leicester has pledged to focus on wholesale funding for large vehicle fleet operators. Evans said: 'The markets we will be concentrating on are ones where we are already well known and regarded, either under our current name or our former guise of Sovereign Finance.
'We have decided to focus our energies where our skills and expertise mean we are already very competitive and can build the business further,' he added.
Sovereign Finance, which ranked 32 in last year's FN50, Fleet News' analysis of the top 50 contract hire and leasing companies in the UK, was renamed Alliance & Leicester Commercial Finance earlier this month following a re-branding of Alliance & Leicester's commercial banking operation.