The deal to acquire TSB from the Spanish parent firm of TSB, Sabadell, beating rival Barclays, was confirmed today (July 1).
Santander intends to integrate TSB into the Santander UK group, meaning it would become the second-largest bank in the country.
Bosses say the deal is “aligned with Santander’s long-term objectives”.
However, the final transaction remains subject to regulatory approvals and Sabadell shareholder approval.
The full transaction is expected to be completed in the first quarter of 2026.
TSB already has a nationwide network of 218 branches and outlets, and a growing digital presence.
It serves around five million customers, with £34 billion in mortgages and £35 billion in deposits.
But with the latest buyout news, TSB combined with Santander would serve nearly 28 million retail and business customers nationwide.
Santander has in the past year entertained bids from both NatWest and Barclays for its UK retail arm.
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.
“We are creating a stronger and more competitive business across key products such as personal current accounts where the combined business will become the second largest bank in the UK by market share.
“The transaction will accelerate our path to greater profitability in the UK and helps achieve a return on tangible equity of 16% by 2028.
“The acquisition also reflects our commitment to growing profitably through disciplined capital allocation. This acquisition meets our goal of achieving a return on investment above 20% and EPS accretion from year 1, while consuming limited capital and having low execution risk.
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“Furthermore, the transaction will not affect Santander’s existing distribution policy and 2025 targets.”
CEO of Santander UK, Mike Regnier, said he hoped they could become “the best bank for UK customers”.
He added: “This is an excellent deal for customers combining two strong and complementary banks, creating one of the most substantial banks in the UK and materially enhancing the competitiveness of the industry.
“At Santander UK we have momentum in our strategy to become the best bank for customers in the UK by investing in technology and service and improving our processes and efficiency.”
Marc Armengol, TSB CEO, 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 Group, a highly regarded banking group.
“I believe this will prove to be an excellent fit for our loyal customers.”
