Santander snaps up TSB Bank for £2.9bn
Santander UK has acquired high street bank TSB in a landmark £2.9bn deal that will significantly beef up the lender’s market share.
The bank’s bid for an all-cash takeover from its Spanish peer Banco Sabadell values TSB at five times its expected 2026 net income.
TSB will add five million customers, £34bn in mortgages and £35bn in deposits to Santander’s portfolio, as well as its 218 branches.
The combined entity will serve 28 million customers and rank second in personal current account branches.
The deal is expected to formally close in the first quarter of 2026, subject to approval from regulators and Banco Sabadell shareholders.
The £2.9 figure represents an eventual final price the lender’s expect the deal to rise to once estimated profits are factored in. Shareholders will be asked to approve a £2.65bn deal.
Sabadell confirmed it was mulling the sale of TSB last month after receiving expressions of interest. Barclays was also speculated to be one of the top lenders interested in a bid.
Santander doubles down on UK market
Santander’s purchase of TSB gives tangible backing to chair Ana Bostin’s claims the bank was not retreating from the UK market.
Botin said: “The acquisition of TSB represents a continuing strategic commitment to our customers in the UK, offering a compelling opportunity that is financially attractive to our shareholders and aligned with Santander’s long-term objectives.
“It strengthens our franchise in a core market through the acquisition of a low-risk and complementary business that adds to our diversification.”
The deal could also give a boost to Banco Sabadell, which purchased TSB in 2015 for £1.7bn.
Sabadell is being forced to fend off a hostile takeover from rival BBVA, which last May approached Sabadell shareholders with a €12.2bn (£10.5bn) all-share merger proposal.
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.
Marc Armengol, chief executive of TSB, said: “TSB is a truly special bank, run by a first-class team that deliver trusted service and support for customers, day in and day out.
“Today’s announcement represents the next exciting chapter for this successful business, as part of Santander, a highly regarded banking group. I believe this will prove to be an excellent fit for our loyal customers.”