Tsb Bnk Grp Share Discussion Threads

[thorpematt] 11/6/2014 13:32

Yes I saw that in the prospectus too. Interestingly HSBC and Yorshire both pulled plug on IOMs last year, although in reality they are still very much in play for wealthy clients at HSBC.

The stat is rather an incomplete one since it doesn't give us an idea in terms of number or valuation. I mean a short-term £2m interest only to a billionaire represents a different risk to 40 @ £50,000s lent to shop assistance working for DEB (John Lewis would different again).

Additionaly IOMs can be perfectly sound although it's hard to argue that there are great returns for endownets at this point in the cycle.

From every perspective Iv'e seen TSB looks good value and well positioned to grow but for sure in their shoes I'd look to be cautious on IOMs simply too get the book balanced. I suppose one negative is to be expected at least?

I am guessing LLOY are hampered to a larger extent due to government ownership and yet still pressured to offer IOMS, thus they want as much off book as possible.

[valedo] 11/6/2014 12:44

Not enthusiastic myself. Can't see how they will outperform LLOY in the medium /long term so would rather put any spare cash there. As for short term my feeling is a 50/50 bet if brokers are already sceptical on the price. Not worth the gamble imo. Big is beautiful as far as banks are concerned despite what the EU says.

[jonwig] 11/6/2014 12:25

"TSB faces risks associated with the concentration of its credit risk, geographically and relating to its interest-only mortgage portfolio, which amounts to approximately 45 per cent of TSB's residential mortgage lending as at 31 March 2014.

"As these mortgages near maturity, TSB may face greater repayment and asset quality risks than competitors with a lower proportion of interest-only mortgages."
[Prospectus p19]

Apparently this is about the highest in the UK, though it's unclear whether that's 45% of the number of mortgages or 45% of the total value.

[rahulgarcia] 11/6/2014 12:13

This seems like a brilliant long term investment!

[johnsoho] 10/6/2014 19:43

I'm in as well and also for the long term. Wonder what price they will be offered to us at, top, middle or bottom of the range?

[2wildthing] 10/6/2014 18:54

I'm in, worth a punt I think, as always I'm in for the long term.

[jonwig] 10/6/2014 09:22

My broker (TDD) has opened for applications but won't let me apply from our joint account.
I suppose that's not just them: applications in a single name only?

So it has to be the ISA, with not much cash to spare.

Some doubts raised on the valuation:

[jonwig] 09/6/2014 18:33

diku - yes, alas.

I didn't think it worthwhile keeping my RM so sold my minimum allocation. I suppose I'd do the same here.

[diku] 09/6/2014 17:05

If I have understood it correctly is it only 125mln shares on offer...if so and the demand bound to be high due to the name then surely joe public will get 200 odd shares as it will be scaled back....Royal Mail mk2...

[mustau] 09/6/2014 07:57

According to the article on advfn, seems overvalued in comparison to the sector.

[jonwig] 09/6/2014 07:29

The price range for the Offer has been set at between 220 pence to 290 pence per Ordinary Share

· The expected offering size is 125 million Ordinary Shares (prior to any exercise of the 10% over-allotment option), representing 25% of TSB's existing Ordinary Shares in issue

· At the mid-point of the price range, TSB's market capitalisation would be approximately £1,275 million

· Final pricing is expected to be announced on or around 20 June 2014, with conditional dealings in TSB shares beginning on the London Stock Exchange on the same day

[jonwig] 08/6/2014 07:19

Lloyds Banking Group is to value TSB at as much as £1.44bn when it floats on the stock market at the end of this month, some 10pc below its book value in order to act as a loss-leader for future share sales.

The bank, which is selling off part of TSB in one of the most eagerly anticipated initial public offerings of the year, will price the challenger bank at a discount to its book value in order to ensure a smooth flotation process.

Investment banking sources said that the smaller bank will be priced at an indicative range of 0.7-0.9 times book value when it begins its investor roadshow tomorrow.

More:

[jonwig] 02/6/2014 07:18

TSB in line for £450m IPO dowry from Lloyds
State-backed bank Lloyds has given the new bank the money for changes to its technology platform if it is taken over

More:

[jonwig] 31/5/2014 08:39

FT this morning:

Shares in TSB will be offered to individual investors when the high street lender floats in June, but Paul Pester, the bank's chief executive, has downplayed the prospect of quick gains.

Parent company Lloyds is selling 25 per cent of TSB through an initial public offering. Up to a fifth of the shares will be sold to retail investors for a minimum investment of £750. Those who hold their shares for a year or more will gain one free share for every 20 bought, up to a maximum of £2,000.

However, many companies that have floated this year have seen share prices fall below their IPO price, causing concern that some investors hoping for a repeat of the Royal Mail bonanza will end up disappointed.

"I'm more worried about retail [than institutional] investors – I want them to understand the dynamics of the business," said Mr Pester at a briefing this week.

"I want retail [investors] to understand the context in which they're investing; it has to be for the medium term."

Matthew Beesley, head of global equities at Henderson Global Investors, noted that TSB does not expect to pay a dividend until at least 2017.

"Whereas this bank used to be the bank that liked to say yes, from an investment perspective I'd probably suggest we say no," he added.

TSB will start life very well capitalised, with more than £20 of equity for every £100 of lending, but plans to expand its balance sheet by 40-50 per cent over the next five years through its current account and mortgage business. Mr Pester said that should move returns on equity towards double-digit levels.

Mr Beesley said the bank has a small share of the current account and mortgage market relative to its branch numbers, meaning there is an opportunity for it to become more efficient and sell more products.

The bank plans to boost growth by re-entering the intermediary mortgage market, allowing brokers to distribute TSB-branded products from the start of 2015, and by converting borrowers to "higher margin" mortgages once interest rates start to rise. Currently, a significant portion of the bank's mortgage book is accounted for by products charging 2 per cent or less above base rate.

Lloyds has to sell the remainder of the company by the end of 2015, which it may choose to do through private placements to institutional investors.

[mitchy] 29/5/2014 20:51

Really don't like the 3 year wait for a divi. That said if the profits,of which there will be plenty,are re-invested to re-establish and grow TSB then I can see the share price doubling quite easily.
Yep, i'll be in.

[jonwig] 29/5/2014 08:22

Cheers, diku.

I'm strongly tempted: a "clean" bank offered below book value.
I think most of the branches will be in Scotland, though domicile will be in England. That might deter some, I don't know.

[diku] 29/5/2014 08:00

Good luck with this new thread...no doubt it will be popular over the coming weeks...

[jonwig] 29/5/2014 07:41

Lloyds unveils TSB share offer: buy 20 get one free

by Alex Steger on May 27, 2014 at 07:38
Lloyds unveils TSB share offer: buy 20 get one free

Lloyds has unveiled plans to float TSB, offering retail investors a free share for every 20 bought in a bid to offset the lack of dividend payments for three years.

In an announcement to the Stock Exchange this morning,Lloyds
confirmed initial plans to sell off 25% of the ordinary shares in TSB and divest the remainder of its stake by 31 December 2015.

Lloyds has been forced to sell the 631 branch network under EU laws for accepting state support during the financial crisis.

The shares will become available in June to institutional investors and retail investors through intermediaries. Lloyds has agreed not to sell any further shares in TSB for 90 days after the float.

Retail investors will receive one free share for every 20 acquired, up to £2,000. TSB said it expected to pay an inaugural dividend for the financial year 2017.

TSB will become the seventh largest bank in the UK by branch network.

[jonwig] 29/5/2014 07:37

It is a 'clean' retail operator, shorn of investment banking activities, yet analysts reckon the 25% share that Lloyds is selling may go for under £1.5bn, or less than its book value. One reason is fatigue among investors after a string of IPOs. But maybe it's telling us that margins in retail banking are going to shrink from here out.,/font>

[jonwig] 29/5/2014 07:34

The chief executive of TSB has claimed there is a "real appetite" among investors for shares in the challenger bank's upcoming flotation despite fears that a glut of IPOs has hit demand.

Lloyds Banking Group on Tuesday pushed the button on TSB's stock market listing, announcing that it expected to sell around 25pc of the company at the end of June.

[jonwig] 28/5/2014 10:13

Plenty of brokers acting as intermediaries. (Some may charge a fee!)
1:20 free shares up to £2000 application and held for one year.
Prospectus mid-June.
Suggested on BBC R4 it may be issued below book value.
No dividends until 2017.

[jonwig] 28/5/2014 10:11

Intention to Float RNS, 27/05/14:


Documents relating to the float:


For list of intermediaries, use the "How to Apply" tab on the website above.