Shares in UK’s OneSavings Bank rise in London debut

June 5, 2014

LONDON (Reuters) – Shares in British lender OneSavings Bank OSBO.L rose in their London stock market debut on Thursday, after the company set the offer price for its initial public offering (IPO) at 170 pence a share, valuing it at 413 million pounds ($692 million).

Shares in OneSavings opened at 172 pence and were trading up 4.7 percent at 178 pence at 0713 GMT.

Sources close to the matter had previously told Reuters the lender would price its shares at the bottom of its price range of 170-225 pence a share, as investors struggle to digest a glut of recent IPOs.

Proceeds from UK listings have more than tripled in the year to date to $8.8 billion, according to Thomson Reuters data last week.

The IPO will raise gross proceeds of 134 million pounds, OneSavings said, of which the lender will receive 41.5 million.

OneSavings was established in 2010 when the struggling Kent Reliance building society was rescued through a 50 million pound capital injection by private equity firm JC Flowers.

The lender made a pretax profit of 31.4 million pounds last year, up from 8.1 million in 2012, and increased lending by 38 percent to 3 billion pounds. It is targeting a dividend payout of at least 25 percent of earnings.

Fellow “challenger bank” TSB – which like OneSavings is looking to take on Britain’s large, established banks – is also set to list after owner Lloyds Banking Group LLOY.L laid out plans last month.

But a more turbulent IPO market has seen Lloyds limit the size of the flotation to 25 percent of shares, the bottom end of expectations, and banking sources said it could be priced at less than TSB’s book value of 1.5 billion pounds.

Barclays BARC.L acted as global co-ordinator on the OneSavings listing. Canaccord Genuity and RBC Europe were joint bookrunners, while Rothschild advised the deal.

(Reporting by Freya Berry; Editing by Mark Potter)

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