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First National Motor Finance up for sale

Abbey National is to break up its First National business – which includes the car finance enterprise – after failing to sell the business as a whole. The bank had looked for £800m for the business and had recently rejected an offer of between £500m and £600m from Lloyds TSB.

The sale of First National is a cornerstone of Abbey National's strategy of disposing of non-core assets. FN comprises three businesses, a consumer finance company Tricity Finance, a sub-prime lending /remortgaging business, and the First National Motor Finance unit.

The Abbey National sale follows a difficult trading period for its First National subsidiary. FN had suffered a 37 per cent downturn in profits to £92m in 2001 but has recovered in the first half of 2002.

First National Motor Finance provides vehicle finance for more than 650,000 customers and has assets in excess of £2.2bn.

Key business partners in motor retailing include the MG Rover dealer network, Dutton Forshaw, Caffyns and Reg Vardy.

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