Santander set to buy TSB - what does it mean for YOU?
TSB was put up for sale by its Spanish owner Sabadell – which bought TSB in 2015 for £1.7billion – as it battles to fend off a hostile takeover approach by another Spanish bank, BBVA.
The deal would see Britain's second largest bank created by share, overtaking NatWest and Lloyds banking groups.
Santander said the combined UK bank would serve nearly 28million retail and business customers.
TSB has around 5million customers, while Santander UK has around 14million retail customers who will now be wondering what the news means for them.
Here is everything you need to know about what the deal means for you if you are a customer of either bank.
Will anything change for customers immediately?
The deal is still subject to regulatory approval as well as shareholder approval from TSB owner Sabadell.
In the short term, most TSB and Santander customers will see no practical change with either brand for some time yet and it is business as usual for both banks.
If it is approved, the deal is expected to complete in the first quarter of 2026, so it any decisions will likely be made in the early months of next year.
Santander's chief executive Mike Regnier said 'we haven't made any decisions yet'.
Santander said it intends to integrate TSB in the Santander UK group If the deal is approved.
Further details will be shared with customers as the banks go through the acquisition process. TSB remains a full-service bank.
Branches could be shuttered
TSB currently has 175 branches and has closed 459 branches since 2015, while Santander has closed 493 branches since 2015. There are fears the proposed deal could lead to further branch closures.
Santander said the combination of the firms would generate savings eventually worth £400million a year but only after restructuring costs amount to £520million.
That is likely to be partly achieved by removing duplication in back-office roles, resulting in job cuts
James Blower, founder of website the Savings Guru says: 'Where there are TSB and Santander branches in the same locations, or within a few miles of each other, I'd be surprised if they do not consolidate in to one. But that's likely to be from 2027 onwards.
Santander customers could see better mortgage rates
The takeover will bring Santander a high-quality mortgage portfolio of over £34billion - 2 per cent of market share in the UK - making it the fourth largest mortgage provider in the country.
Jonathan Vaughan Burleigh, associate analyst, at data and analytics firm GlobalData says: 'That will enable it to better compete with the largest banks who have been outperforming Santander in recent years.'
Santander said the combination of the two banks would bring customers 'greater access to low-risk mortgages and high-quality deposits.'
But it might not be such good news for savings rates due to the combined size of the deposit book - Santander said the deal would would bring it £35billion of consumer deposits.
For this reason, James Blower says: 'They [Santander] will need less new savings to grow so that's likely to mean pricing will need to be less competitive.'
Better digital experience for TSB customers
Santander's acquisition of TSB could bring an enhanced digital experience for TSB's customer base.
TSB still runs on legacy infrastructure which caused a large IT meltdown in 2018, leaving millions of customers without access to online services for weeks.
The issue occurred when TSB tried to move 1.3billion customer records from an old system run by former parent Lloyds to one managed by Sabadell.
It was fined nearly £49million by the Financial Conduct Authority for 'widespread and serious' failings.
Vaughan Burleigh says: 'Santander's focus on cloud technology, and its migration of core banking to its Gravity platform will undoubtedly provide a superior online offering that allows users to manage their day-to-day finances seamlessly and on-demand.'
What did Santander and TSB say about the deal?
Mike Regnier, Santander chief executive, said: '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.
'We are fully committed to ensuring a seamless integration, by leveraging our market-leading technology and significant experience.
'Maintaining the highest levels of service for customers across both banks will be a key priority and we will support all colleagues through the transition, as we invest in building a stronger bank for the future.'
Marc Armengol, TSB chied executive, said: 'Today's announcement represents the next exciting chapter for this successful business, as part of Santander, a highly regarded banking group. I believe this will prove to be an excellent fit for our loyal customers.'
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