Investors rush to clamber aboard UK banks" flotation bandwagon Midsized banks in the UK are expected to be leading candidates for flotation next year, thanks partly to American investors" enthusiasm to rebuild their exposure to Europe. Investment bankers say the pipeline of planned London initial public offerings for next year is "exploding" as vendors try to clamber aboard the rapidly accelerating flotation bandwagon. The 69 London IPOs so far this year have raised a total of $17.3bn, compared with just $2.8bn from 36 issues at the same stage last year, according to Dealogic. This is a striking turnround from the post-crisis trough of 2009, when just 11 deals came to the market and raised $1.7bn. American investors have already shown their enthusiasm for banks as a way of gaining exposure to the UK recovery. They piled into the British government's sale in September of £3.2bn worth of shares it held in Lloyds Banking Group. However, other opportunities to buy into UK banking are limited because the bailed-out Royal Bank of Scotland is still overwhelmingly controlled by the UK government, and has created a "bad bank" to house £38bn of risky loans. Barclays, meanwhile, has an investment bank - an activity some investors are keen to avoid. A senior banker who specialises in IPOs said: "In this context, the flotation of "clean" medium-sized banking operations will attract a lot of interest." One opportunity for investors next year will be the planned flotation of TSB, an offshoot from Lloyds Banking Group, which the state-backed bank was ordered to sell as a condition of its £20bn government bailout. TSB was spun out of Lloyds in September and up to 50 per cent of the business is expected to be floated midway through 2014. RBS is also planning to list a portfolio of its branches under the Williams & Glyn's brand after a proposed sale to Santander fell through. However, RBS estimates that it will take until at least the end of 2014 to separate out the business. The bank has brought in private equity groups Corsair and Centerbridge to help maximise the value of the portfolio. It hopes to achieve a valuation in excess of the business's £1.5bn book value when the new UK retail bank is floated, potentially in 2015. Meanwhile, the Co-operative Group plans to list its banking arm early next year following a restructuring that will hand a 70 per cent equity stake to bondholders. A number of other, smaller lenders have also signalled their intention to list. Virgin Money, which acquired the former Northern Rock business two years ago, has begun exploring a float, although that is unlikely to take place until at least 2015. Metro Bank, a new bank with a small chain of branches in and around London, also has ambitions to float, although it is still lossmaking. Santander UK has repeatedly delayed plans to list in the London stock market.