LITTLE CLARITY ON CUSTOM FLEET
National Australia Bank yesterday confirmed the Financial Review's report that the bank was seeking expressions for Custom Fleet, and said the process was "in response to the receipt of several enquiries from interested parties in relation to Custom Fleet."NAB said no firm decision has been made to sell the business and any decision would be made after a process that may take several months. Nothing in the short statement addressed the question of why sell, other than some boilerplate about shareholder value.However, the fleet management sector, and the finance company sector more broadly is consolidating, and other major banks have been tempted to sell. CBA sold its equivalent business last year (to Super Group) and in 2003 Westpac sold its consumer finance company assets to GE Capital.NAB's disclosures in relation to its fleet management business in recent years are pretty scanty. The bank folded the once separate Custom Credit finance company into the bank proper more than a decade ago, and maintained Custom Fleet simply as a brand.The estimate that this newsletter had heard for the scale of NAB's fleet management business in Australia is in the order of $4 billion to $5 billion, with perhaps $2 billion to $3 billion in assets in the bank's equivalent businesses in New Zealand and Europe. However, these estimates are rather woolly.NAB didn't make clear whether any sale would extend to the bank's Custom Fleet business operated by Bank of New Zealand or in Europe by Clydesdale Bank.And NAB was in fact a buyer of fleet management assets as recently as 2003, when National bought the fleet management assets of Hertz in Australia and New Zealand. That transaction accounted for 5,000 owned and 5,000 managed cars in Australia, and 25,000 cars in New Zealand.Custom Fleet's website says that the division leases or manages more than 130,000 vehicles worldwide. NAB's financial statements show the bank collects about $150 million a year in fleet service fees.