Abbey National on the sale express

By Clayton Hirst
Sunday 08 December 2002 01:00
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Facing its first loss since it floated in 1989, Abbey National is preparing to sell its £1bn train-leasing business as part of a back-to-basics focus on personal financial services.

While the bank claims "no official decision has been made" on the business, senior executives have made informal approaches to potential buyers. The business, known as Porterbrook, has £870m of contracts with UK train operators. It controls around a third of the market, with Angel Trains, owned by Royal Bank of Scotland, and HSBC Rail being its main competitors.

Because there are just three leasing companies, it is unlikely the competition authorities would allow a rival to buy Porterbrook. Industry sources said institutional investors and banks are the most likely candidates. Barclays, GE Capital, WestLB and Bank of America have been named as potential buyers.

Porterbrook has a rolling stock fleet of 4,000 vehicles, serving train operators such as Gatwick Express, South West Trains and Chiltern Railways. It is expected to be one of the first sales under Abbey National's new chief executive, Luqman Arnold. Last month he announced the start of a major review of the business after the company revealed it would suffer big losses in its wholesale banking division.

Abbey National will formally announce which businesses will be sold when it reveals its full-year results on 26 February. Other candidates for disposal include its aircraft leasing arm and international mortgage businesses.

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