Lloyds plans IPO for branches as sale kicks off
Thursday 09 June 2011
Lloyds Banking Group is ramping up plans to float more than 600 of its branches as a new bank on the stock exchange if prices offered by bidders are too low.
The bank appointed Paul Pester last month to run the business during the sale process with a management team below him. It is understood Mr Pester is in line to be chief executive of the new bank if it is sold off by Lloyds in an initial public offering (IPO).
Lloyds' preferred option is to sell the network to a potential trade buyer such as Virgin Money but the bank is running a dual-track process with an IPO as a serious option. Lloyds is set to kick off the sale process tomorrow by sending out an information memorandum to potential bidders. It wants serious offers in by the end of July, Lloyds' chief executive, Antonio Horta-Osorio, said yesterday.
It is selling the TSB name as part of the sale and the historic brand, bought by Lloyds in 1995, could be revived for the new bank. Lloyds TSB will be known as Lloyds Bank on the high street after the branch network is sold.
Mr Pester is not a high-profile figure but he has worked in senior jobs at a number of new entrants and challengers to the main banks.
He joined Lloyds in September from Santander, whose former chief executive was Mr Horta-Osorio. At Santander Mr Pester was responsible for managing Bradford & Bingley and its integration with Abbey and Alliance & Leicester.
He also spent five years as chief executive of Virgin Money and helped to set up Metro Bank, the new lender in the London metropolitan area.
Lloyds was forced by the European Union to sell the network of 632 branches, which bring together the Cheltenham & Gloucester business, Lloyds TSB Scotland and more than 250 Lloyds TSB branches in England and Wales. The network will have a market share of almost 5 per cent and will be the biggest new challenger in UK banking for decades.
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