TSB has been sold by its Spanish owner to rival Santander in a deal worth up to £2.9billion.
Sabadell’s sale of the High Street bank is likely to raise fears over jobs.
TSB will combine with Santander’s UK operations to create the second-largest bank in the country by personal account balances.
The bank was put up for sale by Sabadell – which bought it in 2015 for £1.7billion – as it battles to fend off a hostile takeover approach by another Spanish bank, BBVA.
Barclays was reported to be among those in the running to buy the lender, which employs around 5,000 staff in the UK and has 175 branches.
But it was Santander and its boss Ana Botin who triumphed – despite persistent speculation that it was planning its own exit from the UK.
Triumph: Santander boss Ana Botin said the deal was financially attractive to shareholders and aligned with Santander’s long-term objectives
Botin said the deal offers ‘a compelling opportunity that is financially attractive to our shareholders and aligned with Santander’s long-term objectives.’
Mike Regnier, Santander’s UK chief executive, said the acquisition creates ‘one of the most substantial banks in the UK’ and would make the industry more competitive.
TSB boss Marc Armengol said: ‘The announcement represents the next exciting chapter for this successful business.’
The deal is expected to complete in the first quarter of 2026, subject to regulatory approval. Santander said the combined UK bank would serve nearly 28m retail and business customers.
It also said the combination of the firms would generate savings eventually worth £400million a year but only after restructuring costs amount to £520million.
That is likely to be partly achieved by removing duplication in back-office roles, resulting in job cuts, the Mail understands. Sabadell said it would submit the deal to a shareholders’ meeting on August 6 for its approval.
It said the deal’s initial £2.65billion value could rise to £2.9billion depending on TSB’s profit performance up to the time it closes.
The takeover is the latest in a round of deal-making in the banking sector.
Other recent takeovers include the acquisition of Co-op Bank by Coventry Building Society and Nationwide’s swoop for Virgin Money.
NatWest last year bought a £2.5billion mortgage portfolio from Metro Bank as well as a chunk of Sainsbury’s Bank assets, while Barclays acquired Tesco’s retail banking business.
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