TSB's shares raced ahead on their first day of conditional dealings on the London Stock Exchange on Friday, with parent group Lloyds hailing it an "important further step" to meeting its commitments of its bailout in 2009.The initial public offering (IPO) was priced at 260p a share, above the mid-point of the range of 220-290p set out by Lloyds earlier this month. The offer price valued Lloyds' high street banking arm at £1.3bn. Meanwhile, in response to "significant investor demand", Lloyds raised £455m by selling off 175m shares in the IPO, representing a 35% stake. It had originally intended to sell 125m shares, or 25%.The stock rose as high as 300p on its debut."TSB's reincarnation as a listed entity has gone well, and the strong debut combined with a decision by Lloyds to sell more shares than expected will give the IPO a fizz that so many recent ones have lacked," said David Madden, Market Analyst at IG."Perception is everything, so a good performance on day one puts the shares in a commanding position for future trading," he said.Lloyds said that around 30% of the offer has been allocated to retail investors, though they will have to wait until June 25th for unconditional dealings to take place - conditional dealing is only open to institutional investors.Lloyds' Chief Executive António Horta-Osório said that TSB is a "strong and effective" challenger bank to the main high street lenders, "further enhancing competition in the UK banking sector".Investor appetite for the IPO has increased since Bank of England Governor Mark Carney last week signalled that interest rates could rise sooner than expected. It is thought that TSB's £17.7bn mortgage portfolio will benefit from higher rates.Lloyds must get rid of its remaining shares in TSB by the end of 2015, according to the conditions of its bailout in 2009. It is subject to a 90-day lock-up agreement which starts at the time of the IPO.Analysts at ETX Capital said that Lloyds will benefit from offering more-than-expected shares to the market "as it will make it easier for Lloyds to achieve its obligation to sell off the whole of TSB by the end of next year".By Friday afternoon, TSB was trading 13.4% higher at 294.75p.BC