Santander to Acquire TSB for £2.65bn Amid Concerns Over Branch Closures and Job Cuts
The Spanish bank Santander is buying the British high-street lender TSB for £2.65 billion, raising concerns about job losses and branch closures throughout the merged firm.
The proposed merger, revealed on Tuesday evening, is the consequence of a takeover battle in Santander's native country of Spain, with lender Sabadell deciding to sell TSB in the face of a €11 billion (£9.4 billion) hostile offer from rival BBVA.
Sabadell's shareholders must yet approve the deal, but it may result in TSB changing hands in early 2026, marking the lender's third big ownership shake-up in just over 12 years.
Santander UK stated that the TSB acquisition will make it the third largest UK bank in terms of personal current account deposits, after Lloyds and Natwest.
If it goes forward, the merger would put an end to months of speculation that Santander would leave the UK, fueled by claims that its Spanish executives were irritated by UK laws and the aftermath of the auto loan commission scandal.
Banco Santander's executive chair, Ana Botín, stated, "The acquisition of TSB represents a continuing strategic commitment to our customers in the UK. It offers a compelling opportunity that is financially attractive to our shareholders and aligns 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 raises concerns among employees and customers about job cutbacks and branch closures as Santander merges the bank into its existing UK operations. The partnership could see the TSB brand disappear, marking the end of its 215-year presence on UK high streets. Santander has not yet decided whether to discontinue the brand.
TSB serves 5 million customers through its 175 branches and 5,000 employees. Santander UK has over 14 million customers and 350 branches across the UK, employing 18,000 people.
The purchase is TSB's third major ownership shake-up in 12 years, having been spun out from Lloyds in 2013 as part of measures to enhance competition following its £20.3 billion government rescue in 2008.
TSB was listed on the UK stock exchange in 2014 and was acquired by Sabadell a year later, in one of the largest cross-border banking transactions since the financial crisis.
Sabadell has tried to offload TSB before, hiring Goldman Sachs to examine the chances for a sale in 2020 following a massive IT breakdown.
TSB has been attempting to rebuild its reputation since the bungled rollout of a new IT system in 2018, which prevented millions of consumers from accessing their bank accounts for weeks. It culminated in the resignation of its then-CEO, Paul Pester, following widespread criticism from regulators and MPs.
Marc Armengol, TSB's CEO, stated: "TSB is a very distinctive bank, operated by a first-class workforce that provides trusted service and assistance to customers daily.
"Today's news marks the next exciting chapter for this thriving firm, which is now part of Santander, a well-known banking group. I believe this will be a great fit for our devoted clientele."