TSB's long-term outlook is

26th Sep 2014 12:32

Investec Securities is feeling very positive about TSB's long-term outlook in the wake of Lloyds' decision to sell another 11.5% of its shares in the bank, it revealed in a note to investors on Friday.Having sold 38.5% of TSB in June at 260p a share, Lloyds has placed a further £57.5m stake up for sale, meaning the banking giant will be left with a 50% share in the group. It remains obligated to exit in full by the end of 2015.Investec said that while TSB had "sharply underperformed" against all other UK domestic banks over the past six weeks, the new share sale boosted the group's long-term prospective, though it remained "slow-burn" in the short-term future.The broker added that it estimates TSB will report a loss in the second half of 2014 and in the full-year 2015, albeit one that would be "more than offset by the temporary mortgage enhancement subsidy".It said it expected the bank to become a low-risk legacy-free investment with a sustainable ratio between return of equity and the cost of equity after 2019 and beyond.Investec reiterated its 'hold' recommendation for the stock, with a target price of 290p.TSB shares were down 0.77% to 277.85p.