Source: Sharecast
Santander will buy the lender from Spanish peer Banco de Sabadell for €3.1bn in an all-cash transaction, it announced late on Tuesday.
TSB, which has network of 218 branches and outlets, serves around 5m customers across retail and commercial banking, with £34bn in mortgages and £35bn in deposits.
Once combined with Santander UK, which operates 349 branches, the enlarged group would serve around 28m retail and business customers nationwide.
However, it is not clear at this stage whether TSB would face any branch closures or job cuts from its 5,000-strong workforce. A Santander UK spokeperson was quoted by the BBC as saying it would "make no sense" to have two branches from the same group in a single location.
"This is an excellent deal for customers combining two strong and complementary banks, creating one of the most substantial banks in the UK and materially enhancing the competitiveness of the industry," said Mike Regnier, chief executive of Santander UK.
“This deal accelerates our transformation allowing us to enhance our customer proposition and invest more in innovative products and our digital offering, supported by the human touch service so many appreciate, not least in our new branch formats and enhancements across the country," Regnier said.
The deal is still subject to regulator approvals and the green light from Sabadell shareholders, but is expected to complete in the first quarter of 2026.
UK-listed shares of Banco Santander were up 1.7% at 608.25p in London, while Sabadell climbed 2.4% to €2.77 in Madrid.