Lloyds Tsb In 35m Sale Of Finance Unit

Lloyds TSB Friday sold Business Technology Finance, a leasing finance unit, for £235 million, continuing its disposal of non-core businesses.

The buyer is Newcourt Credit Group of Canada, a fast-growing non-bank provider of finance, which is hoping to use the purchase as a platform for expansion in Europe.

Lloyds said it would make a pre-tax profit of about £40 million on the deal, similar to that on the recent sale of its 90 per cent stake in Schroder Munchmeyer Hengst, a private German bank, to Union Bank of Switzerland for £100 million.

Peter Ellwood, chief executive, said: BTF has been a profitable and successful unit but it no longer fits with our overall strategy. The bank is concentrating on its core retail banking businesses. The Bristol-based BTF helps clients win new business by offering finance to their customers.

 

It has assets of £180m and last year made pre-tax profits of £5.8m on £80.6 million of new business. The purchase increases Newcourts owned and managed assets to more than C$9.4 billion (£4.17 billion).

The unit has been part of Lloyds UDT which concentrates on motor vehicle finance and asset finance for small to medium-sized businesses. BTF specialises in new equipment loans, mainly for computers, business telecommunications, photocopiers and catering/vending machines. Newcourt has pledged to keep BTFs 160 staff and retain Roger Gazzard, who has led the unit since 1988, as managing director. Toronto-based Newcourt has made 16 acquisitions in the past four years, but this is the first one outside North America. David Sharpless, Newcourt chairman, said the purchase would allow the company to broaden services to its North America-based customers, such as Dell Computers and Western Star Trucks. The purchase of a high-quality UK leasing operation with a strong existing portfolio and expert back-office management capabilities is an essential ingredient in Newcourts successful international expansion strategy, he added. The companys rivals include GE Capital and AT&T Capital. Shares in Newcourt, which is listed in

Toronto, Montreal and New York, yesterday climbed C$1.1 on the news of the purchase to C$43, continuing a strong run since April when they were worth C$25. The group is now valued at C$3.4bn. Lloyds TSB shares fell 10p to 747 1 /2p. Copyright Financial Times Limited 1997. All Rights Reserved.