Lloyds Banking Group provides £450m to TSB to transform technology platform

Lloyds Banking Group has provided TSB an additional capital of £450m to enable the bank to transform its technology platform, in case of its takeover following the IPO.

Lloyds Banking Group has provided TSB an additional capital of £450m to enable the bank to transform its technology platform, in case of its takeover following the IPO.

The banking group, which recently launched an initial public offering (IPO) for its TSB unit to divest at least 25% stake, aims to fetch nearly £1.5bn, as reported by The Telegraph. The offer is open to both institutional as well as retail investors.

Investors are not showing expected enthusiasm towards the IPO and by offering a £450m in additional capital, the bank might be able to attract potential investors as it adds more funds to the already well-capitalized bank, the publication reported.

Already been approved by the European Commission and UK HM Treasury, the payment is intended to cover the expenses Lloyds could have spent building a new IT platform when it split TSB out of its own business.

The Telegraph further reported that the payment was negotiated as part of the European state aid approvals earlier this year, when Lloyds extended the deadline of its disposal of TSB’s 631 branches from November 2013 until the end of 2015.

Retail investors who buy or purchase an intermediary will be entitled to one bonus share for every 20 shares purchased up to £2,000, if held for one year after the IPO.