The TSB after incorporation

Stewart, Bill (1986) The TSB after incorporation. Quarterly Economic Commentary, 12 (2). pp. 80-82. ISSN 0306-7866

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On 21 July 1986 the issue of ownership of the Trustee Savings Banks was finally settled with the vesting of the assets of the Trustee Savings Bank Central Board, the Trustee Savings Bank (Holdings) Ltd and the four regional Trustee Savings Banks in the TSB Group pic and the new regional TSB public limited companies, including TSB Scotland pic. The transfer had not been achieved without public controversy and acrimony but has now been settled beyond recall. The Trustees Savings Bank Central Board subsequently through an Offer for Sale sold shares in the TSB Group pic to the general public. After providing for free shares to qualifying employees, making allowance for loyalty bonus shares and after setting aside some £86m for the expenses of the issue, the offer for sale will raise an estimated £.1,274m for the TSB Group plc when the shares are fully paid in September 1987. The offer for sale was heavily advertised and highly successful in that it was over-subscribed eight times and applications had either to be scaled down substantially or rejected. After the initial allotment the TSB Group plc had 3.1m shareholders; 1.3m customers and employees and 1.8m others, mainly individual shareolders as international demand was largely unmet. The shares rose to a substantial premium suggesting that the issue had been underpriced and with an unnecessary underwriting expense. This economic perspective revisits the TSB after incorporation in order to evaluate its success and explore its future.