Initial Public Offering(IPO)





Hello. We’re TSB, Britain’s newest bank, and we’re proud to be back on 631 high streets right across Britain.

We’re here to bring more competition to the UK banking market, and ultimately better banking for all. The way we’ll do that is by serving only individuals and local business customers. That’s why we won’t be offering things like investment banking, or overseas speculation, or big corporate finance.

Instead, our 8000 staff will focus simply on looking after £22 billion on behalf of our 4.5million customers. Because the more we can help our customers, and the communities they are part of, to thrive, the more successful TSB will be. We call this kind of balanced, straightforward banking "local banking".

It’s the kind of banking that we believe is the best way to help the households and local businesses that make up the communities of which we are all a part.

Of course, this approach to banking is nothing new. In fact, it’s over 200 years old.

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TSB's Fundamentals (TSB)

HALF YEAR RESULTS

OPERATIONAL AND FINANCIAL SUMMARY
· Premium listing on the London Stock Exchange achieved on 25 June 2014, with a larger than expected free-float of 38.5% reflecting investor demand.

· In line with expectations, TSB generated a management profit before tax of £78.6m (Franchise: £47.0m; Mortgage Enhancement: £31.6m) and £128.5m on a statutory basis including significant one off items.

· Franchise banking net interest margin increased slightly, in line with expectations, to 3.62% resulting from lower funding costs. The Group's loan loss ratio of 47 basis points reflects the continuing improvement in the economic environment and the quality of the loan book.

· TSB attracted a 9.2% share of current account gross flow in the quarter(5); well above the long term target of consistently attracting more than 6%. This was supported by the initial launch of TSB's popular Classic Plus current account.

· TSB remains strongly capitalised with a pro forma fully loaded Common Equity Tier 1 capital ratio of 18.2%.

· The build of TSB's mortgage intermediary capability remains on track for delivery in Q1 2015.

"The first half of 2014 has been a strong six months for TSB Banking Group. The business completed its successful IPO, delivered financial performance consistent with expectations and made good initial progress in delivery of its growth strategy.

I have been particularly pleased with the way in which consumers across Britain have reacted to TSB's "local banking" model. This is reflected in our market share of current account switching and new current account openings of 9.2% for the quarter - well ahead of our target to achieve consistently above 6%.

Looking ahead, we continue on our mission of bringing TSB's local banking model to more customers across Britain and continuing to grow our business as a result."
Paul Pester, Chief Executive Officer

Interim Management Statement

· TSB generated a Q3 2014 management profit before tax of £41.6m (Franchise: £20.7m; Mortgage Enhancement: £20.9m) and a statutory profit before tax of £33.1m.

· Franchise banking net interest margin remained stable at 3.61%.

· The Group's AQR of 41 basis points reflects the continuing improvement in the economic environment and the quality of the loan book.

· Share of current account gross flow in the quarter of 9.7%(4)(5), above the long term target of 6%.

· TSB remains strongly capitalised with a pro forma fully loaded Common Equity Tier 1 capital ratio of 18.8%.

· The build of TSB's mortgage intermediary capability remains on track for delivery in Q1 2015.

· LBG shareholding down to 50% and TSB has joined the FTSE 250 Index.


"While we have always been clear that we are on a five year journey to grow TSB and its returns, it's great to see people right across Britain continuing to vote with their feet for TSB's local banking model.

Nearly 1 in 10 of all customers who opened new bank accounts or switched during the last quarter chose TSB - this is well ahead of our long term target and is testament to the great service our TSB Partners continue to deliver.

The strong current account performance is one of the factors that has enabled us to grow our customer deposits by £0.5bn to £24.2bn. Meanwhile our plans to enable customers across Britain to buy a TSB mortgage from their local mortgage broker from Q1 2015 remain on track.

I thank all TSB customers and Partners for continuing to reinforce TSB as Britain's challenger bank."
Paul Pester (Chief Executive Officer)

Investec Buy 274.40 290.00 300.00 Upgrades

Final results Wednesday 25th February.

Final Results

Strategic delivery
- 8.4% share of all new and switching bank accounts over the last 12 months(5) - almost 500,000 new bank accounts opened with TSB in 2014.
- Launch of TSB's mortgage broker service as planned - with over £300 million of applications received to date.
- More customers than ever, as measured by our net promoter score, would recommend TSB(6).
- The only high street bank rated in the top quartile for customer service across major UK brands by Which? Magazine(7).

2015 outlook

We expect:

- To consistently attract a greater than 6% share of gross flow of all switching and new personal bank accounts through 2015.
- The balance of Franchise net lending to increase by around £1.5 billion in 2015, with net growth from mid-way through the year.
- To meet these growth targets while controlling costs to no more than £720 million in 2015.
- The Franchise net interest margin to be broadly flat in 2015, with a positive start offset by subsequent compression.
- Franchise other income to fall by c. £15 million primarily driven by lower interchange income.

"2014 was a pivotal year for our business as we started to establish TSB as Britain's challenger bank.

In terms of financial performance, I'm pleased that, on balance, we've exceeded the expectations we set out at the time of our IPO in June last year. In addition, I'm delighted that we've made such a strong start in delivering TSB's growth strategy.

With 8.4% of all people switching or opening a bank account in 2014 choosing TSB; with the recent successful launch of our TSB mortgage broker service and with more people than ever before now recommending TSB to friends and family, it's great to have reached "base camp" on our mission to "bring more competition to UK banking"."

Paul Pester
Chief Executive Officer

Can't see the word Dividend anywhere, does that mean that they don't pay one?

If you bought them in the offer, I think you get 5 percent more shares in December. This is a bit like a divi.

No I didn't, so no actual divi yet.

The price is down 30 p or so over the last 6 months , when they were also rated a buy. The prospects look pretty good.

What's going on . The price is rocketting

Just heard . Takeover talks

RNS Poss offer.

Held these but thought they're going nowhere so sold . Can't believe they can be had so early after breaking free .

They are reckoned to be well undervalued. Perhaps not now though.

Takeover? By who.

Banco de Sabadel a Spanish bank £3.40 per share.

Thanks Victim.

I'm sure these broker's work hard for their money, but how much work has gone into these new target prices today!!

Canaccord Genuity Hold 326.80 235.00 340.00 Upgrades

Investec Hold 326.80 300.00 340.00 Cuts

Berenberg Sell 328.15 220.00 220.00 Reiterates

Numis Hold 328.15 370.00 340.00 Downgrades

Credit Suisse Underperform 328.15 240.00 240.00 Retains

OFFER FOR TSB BANKING GROUP PLC

Summary
· The boards of directors of Banco de Sabadell S.A. (Sabadell) and TSB Banking Group plc (TSB) are pleased to announce that they have reached agreement on the terms of a recommended cash offer for TSB by Sabadell pursuant to which Sabadell will acquire the entire issued and to be issued share capital of TSB (the Offer). Sabadell has agreed to acquire a 9.99 per cent. interest in TSB from Lloyds Bank plc (Lloyds), and Lloyds has entered into an irrevocable undertaking to accept the Offer in respect of its entire remaining 40.01 per cent. shareholding in TSB.

· Under the terms of the Offer, TSB Shareholders will receive 340 pence per share in cash for each TSB Share, which values the entire issued share capital of TSB at approximately £1.7 billion.

· The Offer represents a premium of approximately:

· 4 per cent. to the Closing Price of 327 pence per TSB Share on 19 March 2015, being the last Business Day before the date of this announcement;

· 29 per cent. to the Closing Price of 264.1 pence per TSB Share on 11 March 2015, being the last Business Day before the joint announcement by Sabadell and TSB in response to media speculation that commenced the Offer Period; and

· 31 per cent. to the offer price of 260 pence per TSB Share on its initial public offering announced on 20 June 2014.

· The Offer implies a price to book value multiple of 1.0 times.

· Sabadell expects to support and accelerate TSB's retail growth strategy and accelerate the expansion of TSB's presence in the SME sector. Sabadell intends to continue to operate TSB as a robust competitor in the UK banking market, building on the TSB brand name. Sabadell believes that it and TSB share similar values and customer commitment.

· Sabadell recognises the contributions made by TSB's management and employees to TSB's success and believes that they are very important to the future development of Sabadell. Following completion of the Offer, Paul Pester and Darren Pope of TSB have agreed to continue in their current roles. Paul Pester will also join the Management Executive Committee of Sabadell Group on completion. Will Samuel has agreed to remain as the independent Chairman of TSB following completion of the Offer. Sabadell currently anticipates that the board of TSB would include, in addition to the independent Chairman, two executive directors (being Paul Pester and Darren Pope), three directors to be appointed by Sabadell and three independent non-executive directors.
Strategic and Financial Rationale
Sabadell believes that the Offer is strategically attractive and will deliver the following benefits:
Internationalisation of Sabadell

· Continuation of Sabadell's successful growth strategy, with internationalisation a key part of Sabadell's business plan.

· Pro forma for the acquisition of TSB, 22 per cent. of Sabadell's assets will be located outside its home market, up from 5 per cent. in December 2014.

· The acquisition will result in benefits to Sabadell through enhanced scale and a broader funding and capital base.
Entry into the attractive UK banking market

· Sabadell believes that the UK banking market, including the market serving UK retail and SME customers, is attractive, having a well-defined and stable regulatory framework, consistent profitability and good future growth prospects.

· The challenger bank market is relatively unconsolidated in the UK and Sabadell believes that this will create opportunities to further develop TSB's market position over time.
TSB is a strong challenger bank franchise and positions Sabadell for future growth in the UK market

· TSB is a straight-forward retail and small business bank with a distribution reach of 6 per cent. share of UK branches.

· TSB has already had considerable success in attracting new customers, attracting 8.4 per cent. of new and switching UK personal bank accounts opening in 2014.

· TSB is well-capitalised, with a fully loaded Common Equity Tier 1 capital ratio on a pro forma IRB basis[1] of 19.7 per cent. and has a strong funding position with a franchise loan to deposit ratio of 77 per cent.

· TSB has a strong management team and a committed workforce.

· TSB has a solid franchise with a sound basis to drive further asset and liability growth, having demonstrated strong growth in current accounts in 2014 and having successfully re-entered the mortgage intermediary market in January 2015.
Sabadell's management track record can accelerate TSB's strategic development and financial performance

· Sabadell's management team is delivering on Sabadell's Triple business plan.

· Sabadell anticipates that, under its ownership, TSB will be able to further enhance its growth strategy and efficiency, benefitting from Sabadell's resources, experience in SME lending and experience gained in the Spanish banking market.

· Sabadell perceives opportunities to continue to grow TSB's share in the personal current account market, to accelerate its growth in lending (including through the mortgage intermediary channel), to accelerate the expansion of TSB's presence in the SME sector and to enhance its digital distribution channels.

· Sabadell believes that there will be potential for savings to be made through the expected full migration of the IT transitional services currently provided by Lloyds onto Sabadell's proprietary Proteo technology platform.
Compelling financial returns

· Sabadell believes that substantial savings will be derived from IT optimisation benefits (savings of approximately £160 million per annum on a pre-tax basis are anticipated in the third full year after completion of the Offer).

· Lloyds will provide £450 million in support to deliver the migration of the IT transitional services currently provided by Lloyds onto Sabadell's Proteo platform.

· The acquisition is expected to be capital neutral.

· The acquisition is expected to be EPS accretive in the medium term.


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