Santander UK has announced the acquisition of high street bank TSB in a landmark £2.9 billion deal, significantly enhancing its market presence. The all-cash takeover bid from Santander’s Spanish peer, Banco Sabadell, values TSB at five times its projected 2026 net income.
The acquisition will see Santander’s portfolio swell with the addition of five million customers, £34 billion in mortgages, and £35 billion in deposits, alongside TSB’s 218 branches. This expansion will enable the combined entity to serve 28 million customers, positioning it as the second largest in terms of personal current account branches in the UK.
Subject to approval from regulators and Banco Sabadell’s shareholders, the transaction is expected to formally conclude in the first quarter of 2026. Banco Sabadell acknowledged last month that it was considering the sale of TSB after receiving expressions of interest, with Barclays also speculated to be among the interested parties.
Santander’s acquisition of TSB underlines its strategic commitment to the UK market. Chair Ana Botín emphasised that the deal aligns with Santander’s long-term objectives, describing it as a financially attractive opportunity that strengthens their franchise in a core market. Botín stated, “It strengthens our franchise in a core market through the acquisition of a low-risk and complementary business that adds to our diversification.”
The acquisition may also bolster Banco Sabadell, which initially acquired TSB in 2015 for £1.7 billion. Sabadell is currently defending itself against a hostile takeover attempt from rival BBVA, which proposed a €12.2 billion (£10.5 billion) all-share merger last May.
TSB recently reported a significant increase in profit before tax, reaching £101.3 million for the first quarter of 2025, an 89% rise from £53.4 million in the previous year. TSB’s Chief Executive, Marc Armengol, expressed optimism about the acquisition, stating, “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.”
