What Santander’s takeover of TSB means for customers

Shareholders in the owner of TSB have approved the sale of the bank to Banco Santander, which owns Santander UK.

Sabadell’s investors voted in favour of the £2.65 billion cash sale of TSB to Santander yesterday (6 August).

The takeover will create Britain's third largest bank by share of personal current accounts, behind Lloyds and NatWest. It will add five million customers to Santander UK’s 14 million.

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Santander beat rival bank Barclays to buy TSB, which also put in a formal bid.

The shareholder approval marks an important milestone in Santander’s acquisition of TSB. If it goes ahead, it will follow Nationwide’s takeover of Virgin Money, which completed last year.

Marc Armengol, CEO of TSB, said the announcement “represents the next exciting chapter for this successful business, as part of Santander Group, a highly regarded banking group. I believe this will prove to be an excellent fit for our loyal customers”.

TSB has previously been affected by a dip in profits, as well as a class action by so-called “mortgage prisoners”. In 2018, the bank suffered an IT meltdown, which left customers unable to access online accounts for several weeks. It was fined almost £49 million by the regulator.

Mike Regnier, CEO of Santander UK, 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.”

What does Santander’s takeover of TSB mean for customers?

Santander says it “intends to integrate TSB in the Santander UK group”, which means the TSB name could disappear from UK high streets.

Last month, Regnier said "we haven't made any decisions yet" but "we tend to use the Santander brand on the high street around the world".

There are no immediate changes for customers of either bank, in terms of how they bank or use or open financial products. However, as and when the deal goes ahead, there could be changes to products, branch closures and job cuts.

TSB has a nationwide network of 175 branches and outlets, while Santander has about 349 locations. Where there is both a TSB and Santander branch in the same town, Santander may decide to close one of them.

Santander announced in March the closure of 95 bank branches across the UK, putting 750 jobs at risk, as it focuses more on digital banking.

For now, it is business as usual as the two banks progress the deal. The transaction still needs regulatory approvals to go ahead.

Why is TSB being sold – and when will the deal be completed?

The takeover announcement means Santander has reached an agreement to acquire 100% of TSB Banking Group from Banco de Sabadell, with a valuation of £2.65 billion (about €3.1 billion) in an all-cash transaction.

If everything is agreed, the takeover will likely happen in the first three months of 2026.

Sabadell is selling TSB as it attempts to fend off a long-running hostile takeover approach from Spanish rival BBVA.

If the deal goes ahead, it will end months of rumours over whether Santander would pull out of the UK, sparked by reports that its Spanish bosses were frustrated by UK rules and the fallout from the car finance commission scandal.

Instead, Santander is further cementing its position in this country. Ana Botín, Banco Santander’s executive chair, said: "The acquisition of TSB represents a continuing strategic commitment to our customers in the UK, offering a compelling opportunity that is financially attractive to our shareholders and aligned with Santander’s long-term objectives.”

Santander has a track record of buying up British banking brands. Past takeovers including Abbey, Bradford & Bingley and Alliance & Leicester.

A sale would be the latest step in an eventful history for TSB. It was once owned by Lloyds, which was forced by the European Commission to spin off the business as a separate brand after Lloyds received a £20 billion government bailout in 2008.

TSB floated on the UK stock exchange in 2014 and was bought by Sabadell a year later in a deal worth £1.7 billion, marking one of the biggest cross-border banking deals since the financial crisis.