Lloyds to float revived TSB

State-backed Lloyds Banking Group says it expecs to launch a stock market float of the revived TSB business within eight weeks.

Lloyds Banking Group
Lloyds Banking Group

State-backed Lloyds Banking Group expects to launch a stock market float of the revived TSB business within eight weeks, it has said. The offering will include a retail element for private shareholders.

Lloyds, still 25% owned by the taxpayer, also revealed that its underlying profits rose by 22% to £1.8bn in the first quarter of 2014.

The group – rescued by the Government at the height of the financial crisis – was ordered to spin off more than 600 branches under EU rules on state aid, and has already rebranded the sites as TSB after the collapse of a deal to sell them to the Co-op.

Chief executive Antonio Horta-Osorio said: “Following the launch of TSB Bank in the second half of 2013, we have continued to prepare for an IPO (initial public offering) of the TSB business. We are now well placed, subject to final regulatory approval and market conditions, to launch the IPO in the summer of this year.”

Horta-Osorio added that Lloyds will be selling a minimum of 25% of the business in the offering.

Finance director George Culmer said: “We would be hopeful that there would be an announcement ahead of the end of June. There will be a retail element. The final details in terms of issuance and allocation are still to be decided.”

Lloyds said it was in a strong position ahead of talks with the Prudential Regulation Authority in the second half of this year to restart dividend payments which could see a full-year reward for shareholders in May 2015.

Lloyds also said it had not needed to add to the billions of pounds put by to cover compensation for customers who were mis-sold payment protection insurance (PPI).

It still has £2.3bn kept aside to deal with continuing claims though Mr Culmer was cautious when asked if this would be enough to see the bank through the scandal, which has crippled its balance sheet in recent years.

“I am never going to say never on PPI,” he said.

Lloyds expects to have completed sending out letters to customers it believes might have been affected by the middle of the year.

Reported profit before tax fell 33% to £1.4bn compared with the same period last year, with the comparison including the impact of its sale of a stake in asset manager St James’s Place. Lloyds said it lent £2.6bn to first-time homebuyers in the first quarter, including £342m through the Government’s Help to Buy scheme.

Loans to small and medium businesses grew by 5% in the last 12 months, it added.

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