October 31, 2017 / 4:21 PM / in 10 months

RBS sells leasing unit Lombard assets to meet ring-fencing rules

LONDON (Reuters) - Britain’s Royal Bank of Scotland (RBS.L) has put around 200 million pounds worth of offshore assets from its asset financing group Lombard up for sale, a source close to the matter said on Tuesday.

A worker cleans the glass exterior next to the logo of RBS (Royal Bank of Scotland) bank at a building in Gurugram on the outskirts of New Delhi, India, September 8, 2017. REUTERS/Adnan Abidi

The state-backed bank is selling them as they are currently held in the Channel Islands but new ring-fencing rules that come into force in 2019 mean the lender’s UK retail business can not own assets outside of the European Economic Area (EEA). The bank has decided that the unit would only fit in its ring-fenced business.

Ring-fencing rules require banks to put all of their retail operations into a unit that is separately capitalised from their riskier businesses such as investment banking.

Lombard provides financing to help businesses buy assets such as machinery, ships or aircraft.

The sale was first reported by Sky News.

Reporting by Emma Rumney; writing by Rachel Armstrong; Editing by Greg Mahlich

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