Lloyds confirms float of TSB
Lloyds Banking Group has confirmed plans to sell 25 per cent of lender TSB sometime next month, with the prospectus set to be published in mid-June. The offer will be available to institutional investors and to intermediaries.
Retail investors will receive one free share for every 20 they buy, up to the value of £2,000, and held for a continuous period of one year after the IPO.
The sale is part of a divestment programme, which was mandated by the European Commission on competition grounds. Lloyds is required to sell down its remaining stake by 31 December 2015.
Paul Pester, chief executive of TSB, said:
As we prepare for life as an independent, listed entity we are aiming to deliver strong, steady and sustainable growth, over the long-term. Our straightforward and simple approach to banking is designed to deliver the kind of bank people tell us they want: every penny our customers deposit with us is used to support mortgages and loans for other TSB customers. This is what we mean by local banking for Britain.
The seventh largest retail bank in the UK outlined its strategy to enhance growth, which included aims to accelerate its asset growth by re-entering the intermediary mortgage distribution channel and use its digital banking capability to reduce customer servicing costs. Pester hopes to grow the bank's balance sheet from 40 to 50 per cent.
"TSB has a national network of branches, a strong balance sheet and significant economic protection against legacy issues", said Lloyds Banking Group chief executive, Antonio Horta-Osorio.
However, there was some scepticism about how much demand there would be for the shares. The BBC's business editor, Kamal Ahmed, told BBC Radio 4 he wasn't sure how many people "will be sitting on around, saying to themselves, I must go and buy some bank shares".
The Co-op bank had planned to buy 630 TSB branches, but the plans failed to materialise after the Co-op was found to have a £1.5bn black hole.