The venture aims to offer car leasing contracts to individuals, an area which accounts for 50 per cent of the new car sales market in America but is in its infancy in the UK. Here, such personal contract plans are offered by the car makers directly. These account for just 5 per cent of the market.
Yesterday's move is the first by James Crosby since he took over from Mike Blackburn as Halifax chief. It underlines his determination to develop new lines of business through bolt-on acquisitions in related financial services rather than pursue a merger with another large institution.
Halifax had looked at an outright purchase of the leasing business of Arriva, the transport operator. Lex had been looking for a partner since deciding earlier in the year to break off its joint venture relationship with Lombard, the leasing division of NatWest bank, after Lombard set up its own car leasing business. Lex is paying pounds 128.5m to buy Lombard out.
Tony Juckes, director of Halifax's asset finance business, said: "Lex is considered to be the market leader in the car leasing business. If you consider the position of the Halifax in the retail financial services sector, the chemistry can add up to something quite powerful."
Andy Harrison, the Lex chief executive, said: "We think that being together with the Halifax, and given the strength of our brands, will on its own create new opportunities. The personal contract market has been very big in America and we want to think through the product and marketing carefully."
Meanwhile, rival Woolwich said yesterday that the sharp fall in its mortgage market share earlier in the year had been reversed in the third quarter, in part because of the success of its Open Plan Mortgage.
The bank is still being hit on savings owing to competition from new entrants such as Prudential's Egg, which are prepared to cross-subsidise product launches.Reuse content