The Bank of Scotland corporate banking division of HBOS and Australia's Babcock & Brown have agreed to buy Abbey's European rolling stock leasing operations for an undisclosed sum for the companies' CBRail joint venture.

The partners are acquiring Porterbrook Leasing Company (Euro), which owns 28 diesel and electric locomotives and 67 passenger coaches, to help build critical mass in a market that is set for rapid expansion.

Abbey was happy to offload the European business, which leases rolling stock in several countries, as part of plans to get out of wholesale businesses and refocus on the UK personal financial services market.

CBRail expects moves to increase the involvement of private sector companies in rail operations by governments across Europe to lead to big increases in demand for services like rolling stock leasing.

B&B, which specialises in developing portfolios of transport assets, recently bought two locomotives that CBRail is leasing to Railion Nederland for cross-border operations in Germany, Belgium and the Netherlands.

Abbey has also put the much bigger Porterbrook UK business up for sale in a move that could interest dominant players in the well-established UK rolling stock leasing industry.