Santander has announced a £2.65 billion all-cash deal to acquire TSB from Spanish rival Sabadell, marking another significant move in the wave of UK banking consolidation.
The takeover, which is expected to complete in the first quarter of 2026 subject to regulatory approval, will see Santander absorb TSB’s five-million-strong customer base and expand its UK footprint further.
The acquisition price comfortably exceeds the £1.7 billion that Sabadell paid to acquire TSB in 2015, and comes amid mounting pressure on Sabadell as it attempts to fend off an €11 billion hostile takeover bid from Spanish heavyweight BBVA.
Sabadell confirmed the deal on Wednesday, just a week after acknowledging that it had received expressions of interest for TSB. Barclays was among the formal bidders, but Santander ultimately secured the agreement.
In a statement, Banco Sabadell said the sale would unlock value and allow it to propose a special dividend of €0.50 per share—around €2.5 billion—at a shareholder meeting scheduled for next month. The deal was first reported by Spanish business daily Expansión.
The move reinforces Santander’s long-term commitment to the UK market. Dame Ana Botín, executive chairman of Banco Santander, said: “The acquisition of TSB represents a continuing strategic commitment to our customers in the UK. It strengthens our franchise in a core market through the acquisition of a low-risk and complementary business that adds to our diversification.”
TSB CEO Marc Armengol welcomed the news, stating: “TSB is a UK success story, providing excellent service to more than five million customers. This announcement marks the beginning of a new chapter as part of a major group like Santander.”
The deal will bring together two sizable mid-tier UK retail banking operations. TSB had total assets of £46.1 billion at the end of 2023, with £36.3 billion in loans and £35.1 billion in deposits. Santander UK is already a significant player in the sector and is expected to gain considerable economies of scale from the merger.
The acquisition also continues the momentum of consolidation in UK banking, following Nationwide’s £2.9 billion acquisition of Virgin Money UK, Coventry Building Society’s £780 million takeover of the Co-operative Bank, and NatWest’s and Barclays’ recent purchases of banking arms from Sainsbury’s and Tesco, respectively.
Despite interest from NatWest and Barclays in its own UK retail operations last year, Santander had rejected those bids due to disagreements on valuation. The decision to grow instead via acquisition of TSB signals confidence in its UK strategy.
TSB, which traces its heritage back to 1810, was formerly part of Lloyds Banking Group before being spun off and floated in 2014 as a condition of Lloyds’ government bailout during the financial crisis. It was later snapped up by Sabadell.
The Santander-TSB deal is expected to receive close regulatory scrutiny but is seen as a natural fit by industry analysts. With Sabadell refocusing on its domestic market and Santander doubling down on UK expansion, the transaction could reshape the UK retail banking landscape further as the sector continues to consolidate.
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Santander agrees £2.65bn deal to buy TSB from Sabadell