* Price range narrowed to between 250-270 pence/share
* New range values TSB at minimum 1.3 billion pounds (Adds further details)
By Vikram Subhedar and Matt Scuffham
LONDON, June 17 (Reuters) - New British bank TSB will bevalued at 1.3 billion pounds or more when it lists on the stockmarket this week after its parent Lloyds Banking Group lifted the minimum price it will sell shares at, people familiarwith the matter said.
Lloyds has narrowed the price range for the sale of a 25percent stake in TSB to between 250 pence and 270 pence, sourcesfamiliar with the matter told Reuters on Tuesday. One sourcesaid the sale was "well-oversubscribed" within that range.
The new range values the business at a minimum of 1.3billion pounds ($2.10 billion) or 0.8 times its book, or netasset, value. It was originally priced at between 220 pence and290 pence per share, or between 0.7 and 0.9 times its bookvalue, valuing the business at a minimum of 1.1 billion pounds.
Lloyds, which is 25 percent-owned by the government, wasordered to sell the 631 branches which form TSB by Europeanregulators as a condition for their approval of state aidreceived by the bank during the financial crisis.
The IPO was initially priced conservatively, reflecting acooling of investor interest in UK company flotations in recentweeks. But one source said investor appetite had increased afterBank of England Governor Mark Carney indicated UK interest ratescould rise sooner than financial markets expect, potentiallyboosting the bank's profitability.
TSB's IPO prospectus showed the bank had achieved onlymodest profits over the past 3 years. It made an underlyingprofit of 172 million pounds last year, compared with 28 millionin 2012 and 57 million in 2011.
The shares are due to start trading on Friday. The salesbook is due to close on Thursday, after which the final pricewill be set.
($1 = 0.5956 British Pounds) (Editing by Steve Slater)
Lloyds (LLOY)
