Lloyds Banking Group Plc’ share price down, to sell larger-than-projected stake in TSB “due to significant investor demand”

Lloyds Banking Group Plc made an official statement today, revealing that it managed to sell more shares in TSB Banking Group than it had originally planned “due to significant investor demand”. The shares were priced at 260 pence apiece in the IPO. The bank sold 175 million shares in TSB, which equals to about 35% of the entire division, raising a total of 455 million pounds. Today, in its first day of trading, the shares of TSB surged to as much as 300.25, a 15% increase from the initial price at the IPO.

As reported by the Financial Times, the Chief Executive Officer of Lloyds Banking Group – Antonio Horta-Osorio said: “TSB has a national network of branches, a strong capital base, robust liquidity and significant economic protection against legacy issues. It is already operating on the UK high street and is proving to be a strong and effective challenger, further enhancing competition in the UK banking sector.”

This move of the lender, which is based in the U.K., puts it closer to the sale of the entire division as part of a requirement associated with its government bailout. Currently, the TSB unit, which is under the lead of its Chief Executive Officer Mr. Paul Pester, holds about 4.2% of the checking account market in the U.K. and a total of 631 branches.

“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, which was cited by Bloomberg.

The price set at the initial public offering was situated in the top half of the initially projected range of 220 to 290 pence, which was revealed by Lloyds Banking Group on June 9th. The flotation of TSB has been priced at 260 pence. According to the Lloyds statement, the market capitalization of the TSB unit is expected to be 1.3 billion pounds based on the offer price.

Lloyds Banking Group Plc was losing 0.53% to trade at 76.99 pence per share by 11:26 GMT, marking a one year change of +25.74%. According to the information published on the Financial Times, the 26 analysts offering 12-month price targets for Lloyds Banking Group Plc have a median target of 89.50, with a high estimate of 120.00 and a low estimate of 55.00. The median estimate represents a 15.63% increase from the last price of 77.40.