Wealth Manager - the site for professional investment managers

Register for full access to Citywire’s Fund Manager database, news and analysis. Registration is free and only takes a minute.

Lloyds to raise TSB float price to cash in on demand

1 comment
Lloyds to raise TSB float price to cash in on demand

Lloyds Banking Group could raise the float price of TSB shares to cash in on strong demand from investors.

The state-backed bank last week priced the shares at 220p-290p, but according to  Sky News, Lloyds could move the bottom end of the range up to 240p.

The initial public offering (IPO) will see Lloyds sell 25% of its shares with its remaining stake set to be offloaded by the end of next year. And while this coming glut of supply might be expected to depress the float price, some believe that the sheer weight of demand from IPO-hungry investors and the prospect of interest rates rising sooner than expected could see TSB come to market with a rich valuation.

TSB, which will have a market share of 4.2%, is considered a low growth bank, but a potential earlier rate hike, hinted at by Bank of England governor Mark Carney last week, would boost its margins. TSB offers market-leading interest rates of up to 5% on its current accounts.

If TSB comes to market at the 255p mid-point, it would value the company at £1.275 billion, equated to around 0.85x its book value. Kames UK Equity Absolute Return manager David Griffiths said fair value would be closer to 0.7x book value.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Investment Pulse: the highs and lows of 2014

Investment Pulse: the highs and lows of 2014

This week's Investment Pulse looks back at some of the biggest stories of the year as well as looking forward to 2015.

Play Inside ETFs: Why the US bull-run still has legs

Inside ETFs: Why the US bull-run still has legs

Global equities suffered a sharp sell-off in the third quarter but exchange traded fund investors are continuing to back the US to outperform in 2015

Play Paul Niven: I won't rip up the Foreign & Colonial Trust history book

Paul Niven: I won't rip up the Foreign & Colonial Trust history book

The newly appointed manager of the Foreign & Colonial trust talks about his plans for UK's oldest investment company.

Your Business: Cover Star Club

Manchester wealth firm hires Coutts director for London launch

Manchester wealth firm hires Coutts director for London launch

Former Coutts director Tony Robinson has joined Chartered Wealth Management to head the company’s newly opened London office.

Wealth Manager on Twitter