Structured asset finance has long been
the preserve of HBOS, but as it prepares for its integration within
Lloyds TSB there is uncertainty over whether this is still the
case.

Sources close to HBOS last month said that its Bishopsgate-based
structured finance arm had been wound down, and its senior staff
gone their separate ways.

This follows the bank’s decision earlier this year to fold its
small ticket leasing arm, with customers with turnovers of up to £1
million (€1.28 million), into its corporate division in a move that
will result in job losses and a potential drop in business.

This is part of a wider move by the bank, announced before the
Lloyds tie-up, to fold business banking into its corporate
division. GE Capital Solutions has also scaled-down its lending to
SME business.

Elsewhere, HBOS scaled down its public sector leasing arm
earlier this year, and is understood to be writing less business in
the mid-ticket sector, including yacht finance.

Hill Hire, its vehicle rental and leasing arm with some 21,000
vehicles on its books, and which between 2006 and 2007 saw sales
turnover grow from £10.7 million to £33.2 million, is reportedly up
for sale.

According to year-end 2007 accounts, Bank of Scotland Structured
Asset Finance Ltd, formed 20 years ago this year, and managed by a
team including Ceri Richards, David Shindler, and Keith Glasscoe,
had a sales turnover of £27 million at year end 2006, £3 million
less than the year before.

Dartford-based Bank of Scotland Equipment Finance, headed by
John McCabe and Derek Lamond, had net assets of £11.6 million just
over a year ago.

Last month a Bank of Scotland spokesman said: “Bank of Scotland
continues to be active in the asset finance market. However, just
like any other major bank, we have become more selective about the
business that we choose to write.

“This is a matter of straightforward prudence and nothing
else.”

Meanwhile, the asset finance divisions of Lloyds TSB, including
structured asset finance, rail finance, and corporate aircraft
finance appears to be performing well.

Earlier this year Lloyds TSB Asset Finance saw profits before
tax grow 52 percent year-on-year to reach £35 million.

According to public records, a separately registered business,
Lloyds TSB Asset Finance Division, based in Gresham Street in
London, and comprised of equipment leasing, instalment credit and
mortgage facilities, had a sales turnover of £498 million at 31
December 2006.

Brendan Malkin