Natwest rules out TSB takeover
Natwest has ruled out a takeover of UK high street bank TSB.
The FTSE 100 juggernaut was viewed as the “most likely acquirer” by analysts, with the firm hotly anticipated to begin a deal spree after it re-entered private ownership last month.
TSB’s Spanish owners, Banco Sabadell, confirmed earlier this week that it had received expressions of interest regarding a takeover of its UK unit.
Barclays and Santander are among those considering a formal offer, according to the Financial Times, but Natwest has since opted not to pursue an acquisition and is not actively bidding.
RBC analysts had said the transaction would “make the most sense” for Natwest, with a sale expected to cost £2.6bn, which would “not require Natwest to raise capital”.
A takeover would have helped Natwest “participate in UK consolidation, whilst increasing its market share in mortgages, where the bank is currently under weight,” analysts Pablo de la Torre Cuevas and Benjamin Toms said.
Bids can be tabled for TSB up until June 27.
Santander interested in TSB
Santander has reportedly approached its Spanish banking peer regarding a takeover of TSB.
This followed speculation that Britain’s fifth-largest lender was winding down operations in the UK due to frustrations with the UK’s high regulatory costs.
The bank has expressed concern about the UK’s costly ring-fencing regime and is currently liable for £295m in the historic motor finance scandal.
However, Santander chair Ana Botin has robustly denied a retreat from the UK market. The interest in TSB takeover could be signal the firm is instead looking to increase its high street market share.
Natwest made a play for Santander’s UK retail banking division last month with an £11bn bid. However, the takeover was rejected by the Spanish-headquartered lender, which stated that the offer was too low.
TSB was acquired by Sabadell in 2015 for £1.7bn after previously being owned by Lloyds Banking Group.
Sabadell is facing its own takeover threat on the home front from rival BBVA, which has attempted a hostile takeover of the lender after it rejected several bid offers.
The anticipated sale of TSB comes as the UK’s banking giants look to scale up their market share to retain dominance amid the rising threat of challenger banks.
Analysts told Morning Wire earlier this week that the latest fleet of takeover rumours serves as a continuation of the “recent consolidation of the UK banking industry over the last couple of years.”