Santander agrees £2.65bn deal to take over TSB amid branch closures and job loss fears
Banking giant Santander has struck a £2.65 billion deal to acquire rival TSB, a move that would make it the UK's second-largest bank by personal current account balances and raise concerns over future job cuts and high street branch closures.
If approved, the merger will see Santander and TSB serve nearly 28 million retail and business customers across Britain.
TSB, currently owned by Spanish banking group Sabadell, has 175 branches and around five million customers, largely in personal and small business banking. Its headquarters are in Edinburgh and London, and it holds £34 billion in mortgages and £35 billion in deposits, Mirror reports.
The deal is expected to complete by early 2026, pending shareholder and regulatory approval, with Sabadell due to submit the proposal at a shareholders meeting on August 6. The final value of the agreement could rise to £2.9 billion depending on TSB's profits by the time of closure.
While Santander said the deal presents an 'excellent' opportunity, the bank has already earmarked at least £400 million in cost synergies, primarily to be realised by 2027, raising fears about branch closures and redundancies.
With 350 Santander branches already operating across the UK, many expect a further rationalisation of the network.
A spokesperson for Santander said: 'It is true, however, that the way customers are choosing to bank is changing and all banks are currently undergoing a programme of transformation that reflects this.'
The bank did little to ease concerns when it added: 'It doesn't make sense to have two branches of the same bank close to each other,' although it stressed that no decisions about closures have yet been made.
'For now, it is business as usual,' it said. 'Any colleagues who may be impacted will be informed directly, as is right and proper.'
The future of the TSB brand, which dates back to 1810, remains uncertain. Asked whether the name would survive on the high street post-merger, Santander said: 'This kind of detail will be provided once the deal is completed.'
Sabadell, which is selling TSB in part to fend off a hostile takeover bid from Spanish banking heavyweight BBVA, said the transaction aligns with its strategic goals. It called the agreement 'a good deal' for shareholders and a natural next step for the bank.
Santander UK chief executive Mike Regnier welcomed the merger, describing it as '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.'
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Banco Santander's executive chair Ana Botín said the purchase 'represents a continuing strategic commitment to our customers in the UK… aligned with Santander's long-term objectives.'
She added: 'It strengthens our franchise in a core market through the acquisition of a low-risk and complementary business that adds to our diversification.'
TSB boss Marc Armengol praised his team and expressed confidence in the transition. '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,' he 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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