Monday, October 14, 2013

News: Lombard aims to put £20bn RBS surplus to work

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Lombard, the UK's largest asset finance provider, is committed to helping small to medium-sized enterprises (SMEs) access the £20bn of additional available funding recently announced by The Royal Bank of Scotland Group (RBS).

Lombard recently celebrated its 150 years in business since it began hiring out rolling stock to the railways as the North Central Wagon and Finance Company in Rotherham in 1861. It still has around 600 staff in Manvers and specialises in products such as hire purchase, operating lease and sale and leaseback.

Earlier this year, RBS launched a review into its business lending after identifying £20bn of surplus deposits. Lombard is the group's dedicated asset finance division.

Richard Hemsley, Lombard's newly appointed managing director (pictured), explained that "Lombard is 100% focused on providing the funding that businesses need to get back on their feet.

"The funding of capital investment is of fundamental importance at a time when we are seeing signs of improvements in the economy." 

In the first half of 2013 Lombard has seen increased funding levels from specific sectors notably production assets (up 17%), light commercial vehicles (up 8%) and cars (up 6%).

Lombard's research, conducted by OnePoll with 600 companies in March 2013, showed that businesses were putting off investment in their capital assets which was resulting in lost orders to the tune of £5.4bn.

Hemsley added:: "The UK cannot afford to sit back at this point in the recovery – there are many opportunities for businesses to capitalise and we believe that in order to do this, they should be operating with the most up to date kit. If the UK is to build a sustainable and secure economy, and to establish a competitive position in the global marketplace, it is essential that businesses recognise the important role that investment will play in delivering these objectives."

Lombard specialises in asset finance, a form of funding that uses the asset as security and helps business release working capital. It is a flexible means of funding business investment without taking money out of reserves.

Hemsley concludes: "Despite the recent economic downturn, Lombard has continued to back business lending where other asset finance providers have moved out of the market. We have remained constant in providing support for SMEs in particular, lending £1.5bn to this sector in 2012.

"As I take up my new position, I shall be considering ways in which we can further enhance the service that we provide to our customers. We also have access to the £20bn of surplus deposits available through our parent bank, RBS, which is ready to be put to work to help the economy. This lays down a marker for Lombard and RBS' ongoing commitment to these customers, and to UK businesses as a whole."

Lombard website

Images: Lombard

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