As part of its continued plans to spin off business units and return to full private ownership after half a decade of partial state control, UK-listed Lloyds Banking Group intends to list its retail TSB Banking Group arm in June, it said today.

As part of its continued plans to spin off business units and return to full private ownership after half a decade of partial state control, UK-listed Lloyds Banking Group intends to list its retail TSB Banking Group arm in June, it said today.

The bank has already sold international private banking operations, for example, to Switzerland’s Union Bancaire Privée.

The listing will come at a time when, for various reasons, the market for IPOs in London has improved to coincide with perceptions of a stronger domestic UK economy.

The bank pointed out that, as part of moves to comply with EU laws on state subsidies for banks, the IPO is a necessary step. (Several European banks that have been bailed out by states in recent years have been forced under EU rules to spin off business units, such as the case of ING selling its Singapore-based private bank to OCBC.)

"The decision to proceed with an initial public offering of TSB is an important further step for the group as we act to meet our commitments to the European Commission. TSB has a national network of branches, a strong balance sheet 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,” António Horta-Osório, group chief executive of Lloyds Banking Group, said in a statement.

The bank said it plans to sell about a quarter of of the existing ordinary shares in TSB; it is required under EU law to sell its remaining stake before 31 December 2015.

The IPO is expected to be held in June.

TSB has about 4.5 million retail customers and 631 branches, making it the seventh largest retail banking group in the UK by branches (Source: Financial Times.)