Lloyds Banking Group is reportedly set to announce a price range at which it will sell shares in its TSB retail banking business on the London Stock Exchange that is below its book value.

Lloyds plans to sell 25 percent of the bank at between 2.20 to 2.90 pounds per share, the Reuters news agency quoted industry sources as saying.

At the mid-point of that range, the business would be valued at 1.28 billion pounds ($2.1 billion) - 20 percent less than its book value of 1.6 billion pounds.

Lloyds, 25 percent government owned, is required by European regulators to sell TSB's 631 branches as part of a deal five years ago that saw the bank receive a 17 billion pound bailout.

Lloyds has until the end of 2015 to sell its remaining shares in the bank, which it is likely to do in several tranches. The bank was already forced to request an extension to the original 2013 deadline after plans to sell TSB to rival Co-operative Bank that year fell through.

Some experts believe the lower price for the bank reflects a reduced appetite for IPOs among British investors, after a number of companies began trading on the London exchange in recent weeks.

"I am feeling these IPOs are starting to grow weary on investors," Ed Woolfitt, a sales head at Britain's Galvan Research and Trading, told Reuters. "It may be just a case of them making sure [the IPO] is fully subscribed to."

A Lloyds spokesman contacted by Deutsche Welle refused to comment on the pricing of the stock market listing.

cjc/sgb (Reuters)