NatWest has dismissed the idea of a takeover bid for high street bank TSB.
The FTSE 100 titan was tipped by analysts as the "most likely acquirer", with expectations running high for a flurry of deals following its return to private ownership last month, as reported by .
TSB's Spanish parent company, Banco Sabadell, confirmed earlier this week that it had received preliminary interest regarding a potential acquisition of its º£½ÇÊÓƵ division.
Barclays and Santander are reportedly mulling over a formal offer, according to the Financial Times, but NatWest has since decided against pursuing an acquisition and is not actively in the bidding process.
Analysts at RBC had suggested that the transaction would "make the most sense" for NatWest, estimating the sale price at £2.6bn, which would "not require Natwest to raise capital."
A successful takeover could have allowed NatWest to "participate in º£½ÇÊÓƵ consolidation, whilst increasing its market share in mortgages, where the bank is currently under weight," according to analysts Pablo de la Torre Cuevas and Benjamin Toms.
Potential buyers have until June 27 to submit their bids for TSB.
Santander shows interest in TSB
Santander has reportedly reached out to its Spanish banking counterpart about a possible takeover of TSB.
This comes amid rumours that Britain's fifth-largest lender is considering winding down its operations in the º£½ÇÊÓƵ due to frustrations with the country's high regulatory costs.
The bank has voiced concerns about the expensive ring-fencing regime in the º£½ÇÊÓƵ and is currently on the hook for £295m in relation to the historic motor finance scandal.
Notwithstanding, Ana Botin, Santander's chair, has fervently denied any plans to withdraw from the º£½ÇÊÓƵ market. In fact, the company's interest in acquiring TSB could signify its intention to bolster its high-street presence.
Only last month, NatWest made an £11 billion bid for Santander's º£½ÇÊÓƵ retail banking arm, but the Spanish lender rejected the offer, deeming it too low.
TSB was taken over by Sabadell in 2015 for £1.7 billion, having previously been under the ownership of Lloyds Banking Group.
Meanwhile, Sabadell is fending off a potential takeover threat from BBVA on its home turf, following the rejection of several bid offers, prompting BBVA to launch a hostile takeover attempt.
The expected sale of TSB comes at a time when the º£½ÇÊÓƵ's major banks are seeking to expand their market share to maintain dominance in the face of rising competition from challenger banks.
According to analysts speaking to City AM earlier this week, the latest wave of takeover speculation is a continuation of the "recent consolidation of the º£½ÇÊÓƵ banking industry over the last couple of years."
