The Lloyds Banking Group said on Tuesday that it would proceed with an initial public offering of its TSB Banking Group unit on the London Stock Exchange next month.
Lloyds, which is partly owned by the British government, must divest itself of the TSB network of 631 branches by the end of 2015 under the terms of its government bailout during the financial crisis.
The bank intends to initially sell about 25 percent of TSB’s shares, including an incentive for retail investors to buy stock, and will sell its remaining stake in the unit by the end of 2015.
The forced sale of TSB has not been without its challenges. Lloyds has spent roughly 1.6 billion pounds, or about $2.7 billion, to carve out the business.
European competition authorities, which required Lloyds to divest itself of the branch network as part of its £17 billion bailout, see the breakup as a way to increase consumer choice in the British banking sector.
Analysts have recently questioned whether Lloyds would be able to achieve a valuation equal to TSB’s perceived book value, given what appears to be a recent cooling in the London I.P.O. market.
