This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.bbc.co.uk/news/business-27583942

The article has changed 6 times. There is an RSS feed of changes available.

Version 3 Version 4
Lloyds Bank announces TSB flotation Lloyds Bank announces TSB flotation
(about 1 hour later)
Lloyds Banking Group is to float a 25% stake in its TSB business on the London stock market. Lloyds has announced plans to float a 25% stake in its TSB business on the stock market, with small investors being offered free shares in the bank.
The sale is set to take place next month and there will be an opening for ordinary investors to buy shares. Investors will get one free share for every 20 shares they buy (up to the value of £2,000) and hold for a period of one year after the flotation.
The bank will reward ordinary investors with free shares for longer-term investments. The share sale is set to take place next month.
TSB is being floated to meet European Commission competition rules regarding state aid. Lloyds was bailed out by the UK taxpayer in 2008. TSB is being floated to meet EU rules regarding state aid. Lloyds was bailed out by the UK taxpayer in 2008.
The Co-operative Bank was set to buy TSB but did not go ahead after a £1.5bn black hole emerged at the Co-op Bank. TSB has 631 branches and 4.5 million retail customers, making it the seventh largest retail bank in the UK.
Lloyds must sell its remaining stake in TSB before the end of 2015. The Co-operative Bank was set to buy TSB, but the planned deal collapsed after it emerged that the Co-op Bank had a £1.5bn hole in its finances.
'Important step' 'Simple and clean'
Shares will be offered to institutional investors and to intermediaries for ordinary investors. The bank will give ordinary investors one free share for every 20 shares they buy (up to the value of £2,000) and hold for a period of one year after the float.
António Horta-Osório, Lloyds Banking Group chief executive, 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.António Horta-Osório, Lloyds Banking Group chief executive, 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," he added."TSB has a national network of branches, a strong balance sheet and significant economic protection against legacy issues," he added.
The bank has 631 branches and 4.5 million retail customers, making it the seventh largest retail bank in the UK. Lloyds must sell its remaining stake in TSB before the end of 2015.
TSB will continue to use Lloyds banking operations and computer systems, the bank said. Paul Pester, chief executive of TSB, told investors that TSB had not been affected by banking issues such as the mis-selling of payment protection insurance.
"We have a low-risk, simple and clean balance sheet," he said.
The bank is opening four-to-five times as many current accounts under TSB than under Lloyds, he added.
Investor fatigue?
Banking analyst Chris Skinner told the BBC that TSB - which is expected to be valued at about £1.5bn - was "really a new brand but on an old horse".Banking analyst Chris Skinner told the BBC that TSB - which is expected to be valued at about £1.5bn - was "really a new brand but on an old horse".
The rationale behind spinning-off TSB rather than selling off its assets is to create a "challenger bank" to make UK retail banking more competitive, Mr Skinner said.The rationale behind spinning-off TSB rather than selling off its assets is to create a "challenger bank" to make UK retail banking more competitive, Mr Skinner said.
"There are new challenger banks - there's Aldermore, Shawbrook, Handelsbanken, Metro, Tesco - there are a lot of banks actually launched into the UK economy."There are new challenger banks - there's Aldermore, Shawbrook, Handelsbanken, Metro, Tesco - there are a lot of banks actually launched into the UK economy.
"Over time we'll end up probably again with just a few that actually succeed, and I'm waiting to see which are the few that succeed," he added."Over time we'll end up probably again with just a few that actually succeed, and I'm waiting to see which are the few that succeed," he added.
Gemma Godfrey, head of investment strategy at Brooks Macdonald Asset Management, told the BBC that a slew of stock market listings this year had sapped investors' appetite for more.
"The problem is to do with timing," she said. "We've gone from a famine to a feast, and investors are feeling full."
A number of flotations since the beginning of the year have seen shares now being traded for less than their initial offer value.
Last week, fashion chain Fat Face abandoned its plans to float its shares because of the market conditions.