State-backed Lloyds had initially planned to sell a 25 per cent chunk of TSB, but raised the proportion being floated due to “significant investor demand”.
At 260p, TSB has been priced in the middle of the 250p to 270p range that began to emerge in recent days – that compared with the wider range of 220p to 290p set by Lloyds last week.
Conditional trading among institutional investors starts today, with small shareholders able to buy and sell shares from Wednesday.
TSB is being sold to meet European rules on state aid after its parent got a £20bn taxpayer bailout in the 2008 financial crash.
Lloyds chief executive Antonio Horta-Osorio said: “The successful initial public offering of TSB is an important further step for Lloyds Banking Group as we act to meet our commitments to the European Commission.
“The significant investor demand for shares in TSB, which reflects investors’ confidence in the prospects for the business, has meant that we have been able to set the offer size at 35 per cent.”