Lloyds Banking Group has confirmed a decision to sell around 25% of retail lender TSB.
The flotation is expected to occur next month on the London Stock Exchange, following publication of the prospectus mid-month.
On Monday, Sky News City Editor Mark Kleinman revealed a plan to lure investors with an offer of free shares as part of the 1.5bn initial public offering (IPO).
Shares must be held for 12 months after the float to be eligible for the 5% additional free holding.
The long-awaited sale is part of a mandated divestment programme following its taxpayer-backed bailout of more than 20bn following the global financial crisis.
TSB, which was relaunched as a standalone brand last autumn and operates 631 branches, has set a growth strategy focusing on retail customers.
It is also expected to market itself on a history dating back more than 200 years and intends to lure customers away from bigger rivals that operate risky – but profitable – investment banking arms.
TSB will be taken fully public by the end of 2015 as part of the European Commission mandate on state-aid to companies.
Lloyds still owns the Halifax and Bank of Scotland and remains 25% owned by the British taxpayer.
Lloyds chief executive Antonio Horta-Osorio 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.
“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.”
It was originally planned to sell more than 630 TSB branches to the Co-operative Bank, until a 1.5bn capital black hole was discovered in the mutual’s books.
TSB chief executive Paul Pester said: “Today is a significant milestone on our journey to create a major new competitive force in UK banking.”
27 May 2014 | 7:50 am – Source: orange.co.uk