Santander has announced an agreement to acquire TSB Banking Group plc from Banco de Sabadell, S.A. for £2.65 billion in an all-cash transaction. This acquisition aims to strengthen Santander's position in the UK market by expanding its customer base and lending capacity.
TSB is a well-established UK retail bank with 218 branches and a growing digital presence, serving around 5 million customers. The acquisition will make Santander UK the third largest bank in the country by personal current account balances and fourth in mortgages.
Ana Botín, Banco Santander’s executive chair, commented on the transaction: "The combination of the two high-quality franchises would deliver substantial value to Santander shareholders through increased in-market scale, greater access to low-risk mortgages and high-quality deposits, and operational efficiencies."
The deal is expected to generate a return on invested capital of over 20% and increase return on tangible equity from 11% in 2024 to 16% by 2028. Cost synergies are anticipated at £400 million pre-tax, with restructuring costs estimated at £520 million during 2026 and 2027.
Mike Regnier, CEO of Santander UK, stated: "By integrating technology across Santander UK and TSB, Santander expects to unlock substantial operational efficiencies and support long-term profitability through a simplified, scalable digital banking model."
The transaction is subject to regulatory approvals and Sabadell shareholder approval. Completion is expected in the first quarter of 2026.