TSB

ADVERTISEMENT

Banco Sabadell shareholders unanimously backed the sale of its UK subsidiary TSB to Banco Santander at an extraordinary meeting on Wednesday.

The deal, valued at a minimum of £2.65 billion (around €3.05 billion), represents a notable gain against the acquisition price. In 2015, Sabadell bought TSB for £1.7 billion, equivalent today to around €1.95 billion.

The approval of this divestment comes at a particularly sensitive time, as the Catalan bank is the target of a hostile takeover bid by BBVA. For this reason, the board of directors needed to obtain the explicit approval of the shareholders before closing any strategic operation of this calibre.

TSB, focused on the UK mortgage market, has been one of the key assets in Sabadell’s defence against the proposed hostile takeover.

The sale of TSB is part of Sabadell’s strategy to strengthen its independent position in the face of the takeover bid launched by BBVA. By divesting TSB, the Catalan bank seeks to reduce its international exposure, simplify its structure and generate liquidity to remunerate its shareholders.

The plan includes an extraordinary dividend of €2.5 billion in 2026, which must be approved this afternoon, plus additional ordinary payments.

This increases the attractiveness of maintaining the bank as an autonomous entity and complicates BBVA’s takeover attempt.

The proposed acquisition has sparked political controversy in Spain and in Brussels. Last month, the European Commission sent Spain a legal warning after the government sought to impose conditions on the merger.

The TSB name could disappear from British High Streets after its Spanish owner announced a sale of the lender to rival Santander.

The £2.65bn deal still has to be agreed by the current owner Sabadell’s shareholders, but if it does go ahead, Santander said it “intends to integrate TSB in the Santander UK group”.

The takeover would create Britain’s third largest bank by share of personal current accounts.

A Santander spokeswoman said: “For now it is business as usual for Santander UK and TSB colleagues,” but she did not rule out branch closures, and said there would be job cuts.

“There will be duplication, particularly in back office roles,” she said, adding: “Where there is an impact on people this will be communicated directly to affected colleagues and their representatives as is right and proper.”

TSB has 175 branches in the UK and 5,000 employees while Santander has around 349 banks, but it has been shutting branches, saying more customers want to do their banking digitally.

The deal is expected to close in the first three months of 2026, and its value could go up to £2.9bn considering TSB’s estimated profits until then, Sabadell said.

Marc Armengol, TSB’s chief executive, said: “Today’s announcement represents the next exciting chapter for this successful business, as part of Santander, a highly regarded banking group.”

He added that he believed it would be “an excellent fit for our loyal customers”.

Santander has a track record of buying up UK banking brands and absorbing them into the business, with past takeovers including Abbey, Bradford & Bingley, and Alliance & Leicester.

Ana Botin, executive chair of Santander Group, said buying TSB shows the Spanish bank’s confidence both in its strategy and the UK market.

A sale would be the latest step in an eventful history for TSB, which can trace its roots back more than 200 years.

It was once owned by Lloyds, which was forced by the European Commission to spin off the business as a separate brand after Lloyds received a £20bn bailout during the global financial crisis in the late 2010s.

Lloyds eventually sold its remaining stake in TSB to Sabadell of Spain in 2015 in a deal worth £1.7bn.