Lookers deal sees banks exit the motor trade

The decision by the bank to dispose of the company it bought in 2002 for £48.7m means there are now no banks with a stake in any top 30 car retailer.

Lookers’ acquisition of Dutton Forshaw follows on from the collapse of the Royal Bank of Scotland-owned Dixons group last month – the only other bank with a significant interest in the industry.

Michael Vassalo, motor retail research analyst at independent investment managers Brewin Dolphin, said it was initially the appeal of selling finance that had attracted big finance companies to the industry but they had not achieved their aims.

“Banks were primarily interested in selling finance to customers but this has not really taken off, with stiff competition from the internet and other high street lenders,” said Vassalo.

“With the demise of Royal Bank of Scotland-owned Dixons group, this acquisition means banks are out of the motor trade. There are no banks with a stake in any top 30 group.”

Meanwhile, Lookers finance director David Dyson has rebuffed claims that Lloyds TSB was desperate to offload Dutton Forshaw.

“It was a good deal for both parties. We certainly have not paid crazy multiples,” Dyson said.

The acquisition is expected to be completed by 26 October.