Under-fire Royal Bank of Scotland is to close its Lombard Vehicle Management office in Birmingham – plunging nearly 400 jobs into jeopardy.

The move by the Scottish bank, at the centre of recent major controversies surrounding disgraced former chief executive Fred Goodwin and current chief executive Stephen Hester’s bonus offer, will affect 295 jobs based at Brindleyplace and 397 in total.

A 90-day consultation period has already been launched with 98 staff who are hit immediately. The overall closure process is expected to take between two and three years to complete.

RBS had been seeking to find a buyer for the contract hire business for the last three years as part of its new strategic restructuring but negotiations failed to reach a successful conclusion.

The job cuts will affect a variety of roles, from administrative to sales roles, help desk and fleet contract jobs.

Management broke the news of the jobs cuts to the initial tranche of 98 affected workers at Brindleyplace yesterday.

A RBS spokesman said: “Having to cut jobs is the most difficult part of our work to rebuild RBS. The decision to close Lombard Vehicle Management was a difficult one but is a necessary step in our plan to re-risk and refocus RBS, making the bank safer and stronger.

“We will do all we can to support our staff, offer redeployment opportunities wherever possible, and keep compulsory redundancies to an absolute minimum.”

The Brindleyplace office is a business to business operation, supplying a wide range of large and medium-sized clients in the corporate sector.

The winding down of the Lombard Vehicle Management business comes as RBS, led by Stephen Hester, seeks to re-align its empire following the huge corporate losses amassed under Fred Goodwin, recently stripped of his knighthood.

The Brindleyplace closure plan will see Lombard, dedicated asset finance division of RBS, provide contract hire following a new five-year agreement with ALD Automotive.