Lloyds Plans IPO for TSB Banking Unit

Lloyds will sell 25% of its consumer bank, TSB in an IPO next month and offer bonus shares to retail investors.

Britain’s largest mortgage lender said in a statement today that the prospectus will be published in the middle of June. To meet requirements of regulators after its government bailout 5 years back, Lloyds must sell its left over stake in TSB that has 631 branches and 4.5 million customers.

Antonio Horta-Osorio, Chief Executive Officer of Lloyds said in a statement that TSB, which has the U.K.’s seventh-largest branch network, is already in operation on the U.K. high street.

Shares Rise

At 8:55 a.m. in London, Lloyds shares increased 0.7% to 76.49 pence.

On May 13, the London-based bank has got approval from European Union regulators to decrease the amount of assets it must sell. The EU said the changes would increase profitability of TSB and strengthen the company as a challenger in U.K. banking.

Book value of TSB is estimated to be at 1.5 billion pounds.

TSB intends to pay its first dividend in 2017. Chief Executive Officer of TSB, Paul Pester said TSB will enhance its balance sheet by 40% to 50% by expanding its current-account business and writing more mortgages.