TSB Plc shares surge 12pc on the first day of trading
NEW shares in UK state-backed TSB Banking Group Plc surged 12pc on its first day of trading on the stock market in London. Parent Lloyds Banking Group sold a 35pc stake in the lender, more than initially planned in the initial public offering (IPO).
TSB shares, which were priced at 260 pence in the IPO, closed up 30 pence higher at 290 pence in London, valuing the London-based lender at £1.45bn (€1.8bn).
"It was priced to go and in this case they're going," Gary Greenwood, analyst at Shore Capital, said.
"The company wanted to make sure it got the initial tranche away."
The offering priced TSB at £1.3bn, less than its £1.5bn book value. Lloyds has to sell TSB to satisfy regulators after receiving a government bailout of more than £20bn during the financial crisis.
The IPO is the biggest by one of the so-called challenger banks seeking to compete with Britain's four biggest lenders.
"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," Lloyds chief executive officer Antonio Horta-Osorio said in the statement.
Lloyds, the UK's biggest mortgage lender, is selling 175 million TSB shares, or 35pc of the company, raising £455m. That's more than the 25pc originally planned, "due to significant investor demand", Lloyds said.
TSB, led by CEO Paul Pester, has 4.2pc of the British checking account market and 631 branches.