RBS sells off rail stock business

Angel Trains is the largest of three UK rolling stock firms

Royal Bank of Scotland (RBS) has agreed a £3.6bn deal to sell the UK's biggest train leasing firm.

The sale of Angel Trains to a group led by infrastructure giant Babcock Brown comes as RBS looks to bolster its capital base.

Angel was formed by the UK government in 1994 as part of the privatisation of British Rail. RBS bought it in 1997.

The largest of the UK's three rolling stock leasing companies, it is involved in passenger and freight train markets.

The deal is financed by Babcock with a £2.8bn loan.

'Strains'

RBS is looking to shore up its finances to cover losses during the credit crunch and focus on its finance business capital base

This week it announced a strong take-up for its £12bn rights issue, with shareholders agreeing to buy more than 95% of the new shares offered.

And it has also said that its results for the first six months of the year should be "satisfactory".

In a trading update, the bank revealed no further credit crunch write-downs to the £5.9bn it announced in April.

But it said the global economic outlook was "placing strains on a number of business sectors".