The Gibraltar and Crown Dependency offices of the UK’s largest asset financier, RBS-owned Lombard Finance, are closing to new business, the company has announced.
Lombard will, however, continue to look after existing customers in these locations, a spokesperson said on Wednesday.
Seven jobs will be lost as a result of the closure in Jersey, the bank said. Lombard Finance had a single outpost there, having set up a presence there in 1972. Existing Lombard Finance clients there will be looked after going forward out of RBS International’s offices on Bath Street.
RBS also has a NatWest banking operation in Jersey (pictured above).
The numbers of those affected by the closing to new business in the other three jurisdictions – Guernsey, Gibraltar and the Isle of Man – wasn’t immediately known.
The move comes in the wake of RBS’s announcement, in June, that it would cease offering new Lombard products to offshore customers from July 2017.
An RBS spokesperson said: “As a result of ring-fencing legislation introduced by the UK government, we need to reorganise the bank’s legal entity structure and business model, and have stopped writing new business in Lombard Offshore, with effect from 1 July.”
As in the UK, Lombard’s offshore entities have helped businesses to finance such necessities as vehicles, machinery, equipment and so on that they need to operate.
Lombard Finance was founded in 1861, and lent £6bn to businesses in 2015, according to its website. Its clients, it says, “include the owners of Europe’s largest vodka bottling plant, the UK’s only washing machine manufacturer and the special effects company for movies such as The Hunger Games, Marvel films, James Bond and Batman.”
The ring-fencing legislation cited by RBS in its decision to stop offering Lombard asset financing services on Jersey is due to come into force on 1 January 2019. It will require banks and similar financial institutions to separate out their basic “retail” banking businesses from their more complex and higher-risk operations, in an effort to ensure that retail banking clients wouldn’t be affected if the institution’s risker, investment-related businesses were to fail.
RBS is more than 70% owned by the UK government, following the government’s bail-out in 2008.