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The Spanish bank Santander is buying the British high street lender TSB for £2.65bn, raising fears of job cuts and branch closures across the combined group.
The proposed deal, announced on Tuesday evening, is the result of a takeover tussle in Santander’s home base of Spain, with the lender Sabadell having decided to sell TSB as it faces an €11bn (£9.4bn) hostile approach from a rival, BBVA.
The deal will still have to be approved by Sabadell’s shareholders, but could result in TSB changing hands in early 2026, the third major ownership shake-up for the lender in just over 12 years.
Santander UK said the TSB deal would make it the third largest UK bank in terms of personal current account deposits, behind Lloyds and Natwest.
If it goes ahead, the takeover would end months of rumours over whether Santander would pull out of the UK, sparked by reports that its Spanish bosses were frustrated by UK regulations and the fallout from the car loan commission scandal.
Ana Botín, Banco Santander’s executive chair, 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.”
However, it also raises fears for staff and customers of job cuts and branch closures as Santander integrates the bank into its existing UK operations. The tie-up could see the TSB brand disappear, ending its 215-year run on the UK high street. Santander has not yet decided whether to scrap the brand.
TSB serves 5 million customers through its 175 branches and 5,000 staff. Santander UK has about 14 million customers and 350 branches across the UK, with 18,000 staff.
The purchase marks the third major ownership shake-up for TSB in 12 years, having been hived off from Lloyds in 2013 as part of efforts to increase competition following its £20.3bn government bailout in 2008.
TSB floated on the UK stock exchange in 2014 and was bought by Sabadell a year later, marking one of the biggest cross-border banking deals since the financial crisis.
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It is not the first time Sabadell has tried to off-load TSB, having hired Goldman Sachs to review the prospects for a sale back in 2020, after the fallout of a major IT meltdown.
TSB has been working to repair its reputation since the botched launch of a new IT system in 2018, which locked out millions of customers from their bank accounts, some for weeks. It resulted in the resignation of its then chief executive, Paul Pester, after intense criticism from regulators and MPs.
Marc Armengol, the 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.”
