TSB will be given £450 million by Lloyds Banking Group to cover costs of separating IT systems following its £1.5 billion stock market flotation.
Documents shown to potential investors ahead of TSB’s upcoming initial public offering reveal the funds will be provided to allow the bank to set up independent technology infrastructure after its initial public offering, according to the Telegraph.
It is thought that the payment could help entice potential buyers as the plans to divest the bank continue.
Since its launch onto the high street in September 2013, TSB has continued to use a ‘mirror image’ of Lloyds IT systems. Despite technical glitches on launch, TSB chief executive Paul Pester has claimed that its systems will enable the bank to triple the size of its operations once separated.
Lloyds had initially saved money by deciding against splitting off TSB’s infrastructure, and the payment, which has been approved by the European Commission and HM Treasury, will cover the integration costs it would have expected to have spent.
The Office of Fair Trading has previously warned that the continued reliance on Lloyds’ systems could hinder TSB’s ability to compete independently in the marketplace.