The Royal Bank of Scotland (RBS) will wind down its car and van leasing business Lombard Vehicle Management (LVM) over the next few years.
To allow Lombard to continue to provide a contract hire and fleet management service to existing customers it has set-up an outsourced service under the Lombard brand through ALD Automotive, which is owned by Societe Generale.
An RBS spokesman said: “Having to cut jobs is the most difficult part of our work to rebuild RBS. The decision to close Lombard Vehicle Management was a difficult one but is a necessary step in our plan to de-risk and re-focus RBS, making the bank safer and stronger.
“We will do all we can to support our staff, offer redeployment opportunities wherever possible, and keep compulsory redundancies to an absolute minimum.”
The new arrangement will be officially launched in June/July this year.
Managing director of ALD Automotive Keith Allen said: “We're delighted that RBS and Lombard have chosen ALD to provide contract hire and fleet management solutions for Lombard.
"The new proposition will have access to all the vehicle leasing business generated through RBS banking and Lombard relationships, reinforcing the success of the multi-sales channel strategy we have adopted to grow our business and driving the business further forward to become a top three player within the UK leasing industry."
Fleet News reported more than a year ago that RBS, which is 84%-owned by UK taxpayers, was willing to listen to offers for the company as part of a programme to sell non-core assets.
But, with GE Capital understood to be close to acquiring the business, Sky News reported that RBS had pulled the plug on talks after failing to agree on the price and structure of a deal.
Lombard Vehicle Management had a risk fleet of 70,621 vehicles and a number five ranking in last year’s FN50, while ALD Automotive had a number six ranking with 63,561 vehicles. ALD anticipates funding over 30,000 new vehicle contracts over the next five years as a result of the deal.
Having become a leading white-label provider this latest agreement also further reinforces the success of its multi-sales channel strategy, having seen fleet growth in excess of 20% pa over the past two years.
See next week's Fleet News for more analysis and insight on this breaking news.