October 31, 2017 / 4:26 PM / a year ago

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

FILE PHOTO - A logo at a branch of the Royal Bank of Scotland is seen reflected in a window in the City of London December 16, 2014. REUTERS/Toby Melville/File Photo

LONDON (Reuters) - Britain’s Royal Bank of Scotland (RBS.L) has put around 200 million pounds ($265 million) worth of offshore assets from its asset financing group Lombard up for sale, a source close to the matter said on Tuesday.

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 capitalized 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.

($1 = 0.7548 pounds)

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

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