Santander interested in TSB takeover
Santander has approached its Spanish banking peer, Banco Sabadell, regarding a takeover of its UK high street bank, TSB.
Britain’s fifth-largest lender is reported to have expressed interest in a deal for TSB, which follows owners Sabadell confirming earlier this week it had been approached regarding acquisitions.
A formal offer is yet to be tabled, Sky News reports, and there remains uncertainty whether a bid will come to fruition.
The talks follow speculation that Santander was winding down operations in the UK after frustrations with the UK’s high regulatory costs.
Santander is a part of a fleet of top lenders which wrote to Chancellor Rachel Reeves earlier this year to oppose the costly ring-fencing regime.
The bank has also set aside £295m for the motor finance scandal, where a Supreme Court judgment is expected in the coming months. In April, the firm announced that it would spin off the litigation-hit sector as part of its plans to unify operations.
But Santander chair Ana Botin has robustly denied a retreat from the UK market and interest in a TSB takeover could be confirmation the firm is instead looking to ramp up its high street market share.
Analysts named Natwest as top pick for takeover
Morning Wire reported on Tuesday that Natwest was viewed as analysts’ “most likely acquirer” of TSB.
RBC analysts said a sales transaction could reach £2.6bn, which would “not require Natwest to raise capital”.
TSB was previously owned by Lloyds Banking Group and was acquired by Sabadell in 2015 for £1.7bn.
The takeover frenzy comes as Sabadell fends off its own threat at home from rival BBVA.
BBVA, Spain’s second-largest bank, has eyed an acquisition of Sabadell and lodged several offers with the lender.
After Sabadell rejected bids, BBVA initiated a hostile takeover last May as the bank approached shareholders with a €12.2bn (£10.5bn) all-share merger proposal.
The friction has raised questions about the future of TSB Bank in Sabadell’s ownership as its owners now explore a sale.
TSB increased profit before tax to £101.3m for the first three months of 2025 – an 89 per cent jump from £53.4m in 2024.
The Edinburgh-headquartered lender is not the only bank at the centre of a takeover whrilwind after reports Shawbrook had lodged interest in a takeover of high street lender Metro.