* Pre-marketing ahead of IPO began this week - sources
* IPO could come as early as June - sources
By Matt Scuffham
LONDON, Jan 29 Lloyds Banking Group Plc
has kicked off preparations for a summer 2014 stock market
listing of its TSB brand, launching an investor roadshow to
build up interest in the business, banking industry sources told
Lloyds revived the TSB network as a vehicle to hold the 631
branches it was ordered to sell by European regulators, aiming
to make the market more competitive and as condition for
receiving a 20 billion pound ($33 billion) government bailout
during the 2008 financial crisis.
TSB executives including Chief Executive Paul Pester have
this week begun meetings with potential investors in London and
Edinburgh, the sources said, and the business could be listed as
early as June depending on market conditions.
The meetings are part of a pre-marketing exercise to help
gauge the interest of major investment institutions and Pester
said last November Lloyds may initially sell between 30 percent
and 50 percent of its stake.
Sources familiar with the matter said pricing was not being
discussed in the meetings. However, analysts expect the business
to be worth up to 1.5 billion pounds.
Lloyds, 33 percent owned by the government, has been working
towards a summer flotation of TSB, although Pester said last
October it could still be bought by another bank or financial
buyer such as a private equity firm.
A source familiar with the matter said on Wednesday Lloyds
was approached late last year by W&G Investments, a consortium
led by former Tesco Finance Director Andrew Higginson,
which had previously unsuccessfully tried to buy hundreds of
branches from Royal Bank of Scotland (RBS). But no
formal proposal materialised.
Lloyds must sell its entire stake by the end of 2015 but the
sale is expected to be done in stages, similar to state-backed
rival RBS's disposal of Direct Line, the insurance
business it was required to offload as a condition of its 2008
JP Morgan and Citigroup are advising Lloyds.
Lloyds had planned to sell the TSB branches to the
Co-operative Bank, but that deal fell through amid concerns over
the Co-op's capital position prior to a 1.5 billion pound
shortfall being exposed.
The state-backed lender subsequently rebranded the branches
as TSB, reviving a 200-year-old brand after an 18-year absence.
It had bought the Trustee Savings Bank in 1995.
TSB will become Britain's seventh-biggest lender with around
4.7 million individual customers and 127,000 small business
customers. It will have a 4.5 percent share of the current or
checking account market.
Lloyds and TSB declined to comment.