In a game-changing £2.9bn transaction, Santander º£½ÇÊÓƵ has snapped up high street banking player TSB, a move that's set to considerably bolster its market presence.
The all-cash acquisition offer from Banco Sabadell places TSB at a valuation quintuple its projected 2026 net income, as reported by .
With the addition of TSB, Santander will inherit five million customers, mortgages worth £34bn, and deposits totalling £35bn, not to mention 218 branches.
This merger will see the combined entity catering to 28 million customers, securing the number two spot in personal current account branches.
The completion of this deal is anticipated for the first quarter of 2026, pending the green light from regulators and the nod from Banco Sabadell's shareholders.
The headline £2.9bn figure is the expected final tally once estimated profits are taken into account, with shareholders being approached to sanction a £2.65bn agreement.
Last month, Sabadell hinted at the possibility of offloading TSB after fielding interest, with Barclays also rumoured to be in the running as a potential suitor.
Santander doubles down on º£½ÇÊÓƵ market
Santander's acquisition of TSB lends concrete support to chair Ana Botin's assertions that the bank remains committed to the º£½ÇÊÓƵ sector.
Botin stated: "The acquisition of TSB represents a continuing strategic commitment to our customers in the º£½ÇÊÓƵ, offering a compelling opportunity that is financially attractive to our shareholders and aligned with Santander's long-term objectives.
"The acquisition of TSB represents a continuing strategic commitment to our customers in the º£½ÇÊÓƵ, 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 transaction could potentially provide a lift to Banco Sabadell, which acquired TSB in 2015 for a cool £1.7bn. Sabadell is currently battling a hostile takeover attempt from competitor BBVA, which last May made a €12.2bn (£10.5bn) all-share merger proposal to Sabadell shareholders.
TSB reported a pre-tax profit increase to £101.3m for the first quarter of 2025 – a whopping 89 per cent leap from £53.4m in 2024. Marc Armengol, TSB's chief executive, enthused: "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."
He added: "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.
"It strengthens our franchise in a core market through the acquisition of a low-risk and complementary business that adds to our diversification."
"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."
