The future of the TSB brand has been thrown into doubt after shareholders in Banco Sabadell approved the £2.65 billion sale of the UK high street bank to Santander, paving the way for the historic British lender to be fully integrated into the Santander UK group.
The deal marks a major shift in the UK banking landscape and is expected to lead to branch closures and a phasing out of the TSB name, which dates back to 1810, when the Rev Henry Duncan established the Trustee Savings Bank in Dumfriesshire.
The transaction was approved at Sabadell’s shareholder meeting this week, valuing TSB at 1.5 times book value. Sabadell originally acquired TSB for £1.7 billion in 2015, and the sale will now trigger an extraordinary dividend of €0.50 per share, totalling €2.5 billion for investors.
Following the shareholder vote, Santander UK CEO Mike Regnier reaffirmed the group’s intention to rebrand TSB under the Santander banner, signalling an end to the long-standing name on British high streets.
“We tend to use the Santander brand on the high street around the world,” Regnier told the BBC last month, adding that the integration will deliver cost savings of around 13% across the combined operations.
A spokeswoman for Santander described the acquisition as “an important milestone”, calling TSB “an outstanding franchise” and expressing confidence that the merged entity would offer “an enhanced proposition” to UK customers.
The sale comes amid growing speculation that Sabadell had been preparing a defensive strategy to ward off renewed takeover interest from Spanish rival BBVA, which had previously shown interest in acquiring Sabadell.
However, Sabadell chairman Josep Oliu insisted that the sale of TSB would have proceeded regardless of BBVA’s actions, citing the strategic and financial benefits of divesting the UK operation.
“This transaction delivers value to the bank and its shareholders, enabling the return of excess capital and sharpening our strategic focus on strengthening our franchise in the Spanish market,” said Oliu.
He praised TSB’s performance under Sabadell’s ownership, noting the bank had made significant progress in operational efficiency and profitability after a period of restructuring and digital investment.
The deal raises questions for TSB’s 5 million customers, many of whom are loyal to the bank’s historic British identity. The planned integration with Santander UK is expected to involve a rationalisation of the branch network, as both banks seek to streamline operations and reduce duplication.
Industry analysts expect more details about branch closures and customer migration plans to be revealed in the coming months, with regulators expected to monitor the process closely to ensure continuity of service.
TSB, which was previously part of Lloyds Banking Group before being spun out and sold to Sabadell, has spent the past decade repositioning itself as a digitally focused challenger bank, but has struggled to maintain market share in a highly competitive sector.
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TSB brand under threat as £2.65bn sale to Santander approved by Sabadell shareholders