* 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 Reuters.
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 bailout.
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.