Lloyds Plans To Float 25% Of TSB Banking Group

(RTTNews) - British banking major Lloyds Banking Group Plc (LYG, LLOY.L) Tuesday said it plans to sell about 25 percent of the existing ordinary shares in TSB Banking Group Plc to meet European Commission's ruling related to state aid. TSB operates as a separate division within Lloyds Banking Group.

The initial public offering is expected to take place next month, the lender said. Lloyds is required to sell down its remaining stake before the end of 2015. TSB was launched as a standalone brand in September 2013.

TSB would list on the premium segment of the Official List and the main market of the London Stock Exchange.

TSB has a customer base of 4.5 million retail customers, a comprehensive range of retail banking products and a multi-channel, national distribution model, including 631 branches, which equates to around 6 percent of the retail bank branches in the UK.

Lloyds was required by the European Commission to sell the 631 branches that it rebranded as TSB as a condition that was fixed for receiving a government bailout of 20 billion pounds during the 2008 financial crisis.

The EC had initially set Lloyds a deadline of November 2013 for the separation of TSB. However, that deadline was missed after Co-operative Bank pulled out of a deal in April to buy TSB.

António Horta-Osório, Group chief executive of Lloyds Banking Group said, "The decision to proceed with an initial public offering of TSB is an important further step for the Group as we act to meet our commitments to the European Commission. TSB has a national network of branches, a strong balance sheet and significant economic protection against legacy issues."

According to Lloyds, the offer will be available to institutional investors in qualifying jurisdictions, and to intermediaries in the UK, the Channel Islands and the Isle of Man, who will facilitate the participation of their retail investor clients in those same jurisdictions.

As per the terms of the intermediaries offer, each retail investor will receive one free share for every 20 shares acquired, which comes up to 2,000 pounds, and held for a continuous period of one year after IPO.

In respect of its residual holding of ordinary shares in TSB following the IPO, Lloyds stated that it has committed to a 90 day lock up arrangement following Admission.

Paul Pester, chief executive officer of TSB Banking Group stated, "As we prepare for life as an independent, listed entity we are aiming to deliver strong, steady and sustainable growth, over the long-term."

In last December, Lloyds Banking had placed 109 million shares at a price of 630 pence per share, intended to sell shares in St James's Place plc (STJ.L). The gross proceeds totaled about 680 million pounds.

LLOY.L is currently trading at 76.56 pence, up 0.78 percent, on a volume of 37.15 million shares.