Anglo Irish Bank to leave car leasing business

Anglo Irish Bank plans to leave the retail car leasing businesses in Ireland and the UK, The Irish Times has learned.

Anglo has €135 million worth of car loans on its books in the Republic, out of total advances of €15 billion. It contributes around €3 million to the bank's profits, which will be about €600 million this year. It has £135 million sterling (€196 million) loaned out in the UK through brokers. The loans generate profits of £3 million. Its total loans business in the UK is valued at £11 billion.

Anglo plans to sell the UK business, and is in the process of seeking advisers to manage the process.

In Ireland, the company will cease providing the loans from August. The move will not affect borrowers with Anglo car loans, who will continue to repay their advances as normal.

The bank is leaving both businesses as they are not core to its activities and amount to less than 1 per cent of all advances in both countries, according to a spokesman. Both businesses are aimed at the retail market, while the bank is focused on the corporate sector.

He explained that the car dealers arrange the loans and the customers frequently don't even realise that Anglo is providing the finance.

"It's a commodotised product and very competitive, and it isn't really part of what we do," the spokesman explained yesterday.

The bank operates by providing multiple services to business customers. This requires it to develop a relationship with its clients.

It will continue to provide fleet finance with businesses.

Around 15 of its staff will be affected by its decision.