LLOYDS Banking Group confirmed plans to float its TSB business in the middle of next year to appease European rules on state aid.
Paul Pester, chief executive of TSB, said Lloyds will initially sell 30% to 50% of the business, through an initial public offering. This will include a retail offer for small shareholders, as with the Royal Mail and Direct Line flotations. Further share sales will follow.
TSB, which has 631 branches, was launched as a standalone brand in September, marking a return to high streets after an 18-year absence. It is being offloaded in line with EU rules following the £20 billion state bail out of Lloyds at the height of the financial crisis, although it has had to ask for a extension to the timetable after an initial deal to sell the branches to the embattled Co-operative Bank fell through in April.
TSB could reportedly be valued at between £1.5bn to £2bn when it lists on the stock exchange.
Mr Pester said the group may begin City presentations with potential institutional investors in January.
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