TSB share sale values bank at Â£1.3bn

20 June 2014 Last updated at 07:08

Lloyds Banking Group has increased the amount of TSB shares it is selling as a result of strong investor demand for the stock market listing,

Such has been the level of interest in the bank's stock market debut that it was 10 times oversubscribed.

The 25% taxpayer-owned bank will sell a 35% stake in TSB, up from an originally planned 25% stake.

Shares have been priced at 260p each, giving TSB a market value of £1.3bn.

The stock market debut comes after Lloyds was ordered to sell 631 branches by European regulators in 2009.

It must sell its remaining shares in TSB by the end of 2015.

The share sale will see Lloyds net £455m. The bank said 30% of shares had been sold to retail investors.

Retail investors were not able to buy or sell shares on Friday. Shares were open to institutional investors, however, under conditional trading rules.

They were trading at 290p in early trading, up 12% on the 260p initial price at launch, and taking the share price to the top of the range previously set by the bank.

The bank had originally planned to sell the branches to the Co-op Bank, but the deal fell through last year, after a £1.5bn black hole was discovered in the Co-op's balance sheet.

Antonio Horta-Osorio, group chief executive of Lloyds Banking Group, said: "The successful initial public offering of TSB is an important further step for Lloyds Banking Group as we act to meet our commitments to the European Commission.

"TSB has a national network of branches, a strong capital base, robust liquidity 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."

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