Lloyds prices TSB IPO below book value

|About: Lloyds Banking Group plc (LYG)|By:, SA News Editor

As expected, the pricing for Lloyds' (LYG) TSB offering comes in below book, with the midpoint of the IPO range valuing the business at $2.1B, or 0.8x book value. In comparison, Lloyds itself is currently trading at 1.3x book value.

TSB's loan book - mostly comprising mortgages from the Cheltenham & Gloucester building society where the rate is capped at 2% over the base rate vs. the market average of 3.9% - is likely behind the discount.

TSB has 4.5M customers and 6% of the U.K.'s bank branches, making it Britain's 7th-largest retail bank.