RBS Finsure 'to close'

Royal Bank of Scotland is proposing to close its premium finance arm RBS Finsure.

The bank began a one month consultation with its 80 staff based in London and Peterborough, today.

An RBS spokesman denied that the move was part of the disposal of RBS Insurance, announced yesterday.

If the proposal is accepted, new business will cease in the first half of 2010 and existing business will be run off over a 12 month period. The business, a subsidiary of broker insurer NIG, offers personal and commercial premium finance to policyholders who pay by monthly instalments and is used by brokers in the UK.

The company said that following the consultation process, any employees impacted will be invited to apply for alternative roles within the group and discussions will be entered in to on the process of redundancy and closure.

Trevor Brittain, head of Finsure, said: “The current economic environment and market conditions have had an impact on all lending businesses. Whilst Finsure has continued to grow through this period, in the longer-term we do not believe the organisation can sustain a sufficient level of profitable growth to meet our business and capital requirements.

“Therefore, after careful consideration and a detailed review of future requirements and long term potential, we are proposing the closure of the business. This decision has not been made lightly and we have explored every possible option; however, we sadly have no alternative but to make the announcement of this proposal today."