Lloyds Banking Group will be left with a 50% stake in its TSB banking arm after kickstarting a share sale.
The bailed-out bank sold off 38.5% of TSB in June, when shares were priced at 260p each, and intends to sell a further 11.5%. TSB shares closed on Thursday at 280p, suggesting Lloyds would raise about £160m.
The sale of the TSB shares was kickstarted as Lloyds revealed it had given £1.2m shares to 11 of its most senior staff – including chief executive António Horta-Osório –` under new payments made to sidestep the EU bonus cap.
All the major banks are handing top staff “allowances” in shares to get round the bonus cap, which restricts bonuses to one times salary unless shareholders approve payouts of twice the size of a salary.
Lloyds, in which the taxpayer has a 24% stake, is spinning out 631 branches under the TSB brand because of conditions imposed at the time of its £20bn bailout. The second tranche is being sold now because a 90-day period between sell-offs has elapsed since the previous sale, and because of the no vote in the Scottish independence referendum, which TSB and Lloyds had said would cause them to move business from Scotland.
The branches were supposed to be have been sold by now but the process has been delayed because of the failed attempt to sell them to Co-operative Bank. Royal Bank of Scotland, 81% owned by the taxpayer, has to sell more than 300 branches under the terms imposed by the EU at the time of its £45bn bailout. Those branches are to be branded Williams & Glyn – a name last seen on the high street 30 years ago.