Lloyds Banking Group Confirms TSB IPO

Lloyds Banking Group has unveiled its intention to float TSB shares onto the London Stock Exchange in June 2014.

The British banking giant, which is part-owned by taxpayers after a state-funded financial crisis bailout, said it will sell 25% of TSB to investors. Reports suggest it is hoping to raise £1.5bn. The rest of TSB will follow by the end of 2015.

TSB is a newly-created subsidiary of Lloyds. Though historically a separate bank with foundations in the nineteenth century, TSB was merged into Lloyds under its acquisition in 1995.

When the financial crisis took hold and Lloyds needed to be rescued, the terms of the £20.5bn bailout – which were governed by European Union state aid rules – required it to carve TSB off and sell the bank.

"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," said António Horta-Osório, group chief executive of Lloyds Banking Group.

"TSB has a national network of branches, a strong balance sheet and significant economic protection against legacy issues.

"It is already operating on the UK high street and is proving to be a strong and effective challenger, further enhancing competition in the UK banking sector."

TSB has 4.5 million customers across 631 branches in the UK.