The IPO, which will give TSB a market cap of approximately £1.275bn, will see 125m shares allotted, equivalent to 25% of TSB’s existing ordinary shares.
The price is below TSB’s net asset value of £1.6bn, according to Reuters, reflecting a cooling of the UK IPO market in recent weeks.
Lloyds is required by European regulators to sell the 631 TSB branches by the end of 2015, as a condition of receiving state aid amid the financial crisis five years ago.
The sale is expected to be the first of several tranches.
A TSB spokesman said: “Of course pricing and share prices are set by the market – however, with TSB it’s important to remember we have a clear strategy to deliver significant growth. We intend to grow TSB’s franchise balance sheet by 40 – 50% over the next five years and over that period move towards double digit return on equity. Feedback from investors so far has been positive and we are comfortable with the price-range which has been set.”
