* IPO priced at 170 pence a share
* Values business at 413 million pounds
* Price range was 170-225 pence a share (Adds further details)
By Freya Berry and Matt Scuffham
LONDON, June 4 (Reuters) - Britain's OneSavings Bank is set to price its London stock market listing at 170pence a share, at the bottom of the price range, valuing thebusiness at 413 million pounds ($691.3 million), two sourcesfamiliar with the matter said.
OneSavings, which is owned by US private equity fund JCFlowers, had targeted a price range of 170-225 pence a share,and a valuation of 413-530 million pounds, the sources toldReuters on Wednesday.
The bank, which is looking to bolster its capital and obtainfunding for future growth, is one of several new British bankseying stock market listings. However, investor interest in UKcompany flotations has cooled in recent weeks following a flurryof activity earlier in the year.
Lloyds Banking Group said last month that itplanned to sell just a quarter of its shares in TSB in the firsttranche of an initial public offering, having originally plannedto sell up to 50 percent.
Outside the banking sector, clothing chain Fat Face pulled aplanned 110 million pound offer while holidays-to-insurance firmSaga priced its shares at the bottom end of market expectations.
OneSavings was created in 2010 when the struggling KentReliance building society was rescued through a 50 million poundcapital injection by JC Flowers. The bank made a pretax profitof 31.4 million pounds last year, up from 8.1 million in 2012,and increased lending by 38 percent to 3 billion pounds. It istargeting a dividend payout of at least 25 percent of earnings.
($1 = 0.5974 British Pounds) (Reporting By Freya Berry; Editing by Erica Billingham)