Shares in TSB rise

The Northern Echo: (7357564) (7357564)

TSB added £200m to its value after returning to the stock market.

The surge increased the group's value as state-backed Lloyds Banking Group floated a larger-than-expected 35 per cent chunk of the business, increased from 25 per cent due to investor demand.

About 60,000 ordinary retail investors took part in the offer, which was more than ten times oversubscribed.

Fund manager Hargreaves Lansdown said Lloyds had scaled back applications on tranches of more than £2,000 of shares after they proved "extremely popular".

They were initially priced at 260p, valuing TSB at £1.3bn, but later soared past the 300p mark before settling back at above 290p.

Chief executive Paul Pester said: "I am delighted with the level of investor demand for TSB's shares, especially amongst retail investors, who make up approximately 30 per cent of the initial public offering allocation.

"It shows there is real appetite for a different kind of bank ; a high street bank and not a Wall Street bank, which is focused on customer service.

"We are now focused on delivering on our strategy of bringing more competition to high street banking across Britain."

The float raised £455m and sees TSB return to the market for the first time since 1995 when it merged with Lloyds.

TSB, which has 631 branches, has been re-launched after Lloyds was forced to offload the sites under European rules on state aid.

It must dispose of its holdings in the business by the end of next year.

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