The firm’s fleet will be wound down over the next few years, with any new contracts and vehicles being white-labelled by ALD Automotive, which has entered into a five-year agreement with the launch date scheduled for around June/July this year. Lombard’s fleet numbers around 70,000, and ALD expects to write around 30,000 new cars over that period on the back of this deal.

It is thought around 100 employees will be affected by the decision, with a spokesman saying that for those not opting for voluntary redundancy, efforts will be made to relocate them within other parts of the business. Current contracts will be managed by LVM while it is being run down.

An RBS spokesman said: ‘Having to cut jobs is the most difficult part of our work to rebuild RBS. The decision to close Lombard Vehicle Management was a difficult one but is a necessary step in our plan to de-risk and re-focus RBS, making the bank safer and stronger. We will do all we can to support our staff, offer redeployment opportunities wherever possible, and keep compulsory redundancies to an absolute minimum.’

In 2009 at the height of the banking crisis, it was decided the fleet leasing arm of RBS was ‘non-core’ and as such, was put up for sale. Rumours in the industry suggested that much of LVM’s business was heavily price-led and not especially profitable. As a result, finding a buyer proved difficult, and ultimately impossible.

The branding for the new ALD-run operation is still to be announced. Managing Director of ALD Automotive, Keith Allen, said: ‘We're delighted that RBS and Lombard have chosen ALD to provide contract hire and fleet management solutions for Lombard. The new proposition will have access to all the vehicle leasing business generated through RBS banking and Lombard relationships, reinforcing the success of the multi-sales channel strategy we have adopted to grow our business and driving the business further forward to become a top three player within the UK leasing industry.’