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* Pre-marketing ahead of IPO began this week - sources
* IPO could come as early as June - sources
By Matt Scuffham
LONDON, Jan 29 (Reuters) - Lloyds Banking Group Plc has kicked off preparations for a summer 2014 stock marketlisting of its TSB brand, launching an investor roadshow tobuild up interest in the business, banking industry sources toldReuters.
Lloyds revived the TSB network as a vehicle to hold the 631branches it was ordered to sell by European regulators, aimingto make the market more competitive and as condition forreceiving a 20 billion pound ($33 billion) government bailoutduring the 2008 financial crisis.
TSB executives including Chief Executive Paul Pester havethis week begun meetings with potential investors in London andEdinburgh, the sources said, and the business could be listed asearly as June depending on market conditions.
The meetings are part of a pre-marketing exercise to helpgauge the interest of major investment institutions and Pestersaid last November Lloyds may initially sell between 30 percentand 50 percent of its stake.
Sources familiar with the matter said pricing was not beingdiscussed in the meetings. However, analysts expect the businessto be worth up to 1.5 billion pounds.
Lloyds, 33 percent owned by the government, has been workingtowards a summer flotation of TSB, although Pester said lastOctober it could still be bought by another bank or financialbuyer such as a private equity firm.
A source familiar with the matter said on Wednesday Lloydswas approached late last year by W&G Investments, a consortiumled by former Tesco Finance Director Andrew Higginson,which had previously unsuccessfully tried to buy hundreds ofbranches from Royal Bank of Scotland (RBS). But noformal proposal materialised.
Lloyds must sell its entire stake by the end of 2015 but thesale is expected to be done in stages, similar to state-backedrival RBS's disposal of Direct Line, the insurancebusiness it was required to offload as a condition of its 2008bailout.
JP Morgan and Citigroup are advising Lloyds.
Lloyds had planned to sell the TSB branches to theCo-operative Bank, but that deal fell through amid concerns overthe Co-op's capital position prior to a 1.5 billion poundshortfall being exposed.
The state-backed lender subsequently rebranded the branchesas TSB, reviving a 200-year-old brand after an 18-year absence.It had bought the Trustee Savings Bank in 1995.
TSB will become Britain's seventh-biggest lender with around4.7 million individual customers and 127,000 small businesscustomers. It will have a 4.5 percent share of the current orchecking account market.
Lloyds and TSB declined to comment.
