Account holders with TSB Bank can forget any hopes of a cash bonanza when the bank is floated on the stock market next year, as the entire proceeds will go to the Government, writes Siobhan Creaton.

The savings bank has agreed to merge with ACC Bank and become a publicly quoted company, but unlike the flotation of building societies and mutually-owned life assurers its customers will not qualify for a windfall payment.

TSB Bank is run for its depositors by trustees, but technically is not legally owned by the depositors, the trustees or anyone else. This unique structure means that the proceeds of the flotation must by law revert back to the Government. The merged entity is expected to realise up to £500 million (#635 million) through a flotation. Building societies are mutually owned, with each qualifying account-holder entitled to realise a value for their shares when a society converts to a public company. Last year, 200,000 First Active customers were given free shares worth around £1,000 when the former building society changed its status. The next bonanza is expected to go to Canada Life account-holders when the life assurer floats towards the end of the year. Carpetbaggers hoping to make a killing piled into Canada Life policies in 1998 to ensure they would qualify for free shares. Their windfall is expected to be worth around £2,000 per policy.