RBS aviation division sale deal is struck

Royal Bank of Scotland has announced the sale of its aircraft leasing business to one of Japan’s biggest banks for £4.7 billion.

The sale to the Sumitomo Mitsui Financial Group represents the biggest single disposal by RBS since the state-backed bank’s government £45bn bail-out in 2008.

Established in 2001, RBS Aviation Capital had become the world’s fourth largest aircraft lessor by owned and managed fleet value. The business is based in Dublin and employs 69 specialists based there and in eight other locations across Europe, the United States and Asia.

In the six months prior to June last year, it reported a profit of £58 million. The division owns 206 aircraft and had commitments to purchase a further 87 by 2015.

The sale ends a two-year attempt by the bank to sell the business. The division was designated part of RBS’s non-core assets in February 2009 following a strategic review by the group had called for the sale of the bank’s assets in order to strengthen its balance sheet.

The sale, which expected to be complete later this year, will mean the bank’s unwanted assets have been cut from £258bn in 2009 to less than £100bn

The bank said the management team and staff of RBS Aviation Capital were “highly regarded in the industry and will remain with the business.”