Santander to buy TSB Bank for £2.9bn

Santander UK has announced that it will acquire TSB from Banco Sabadell in a £2.9 billion deal.

The all-cash takeover values TSB at five times its projected 2026 net income. The acquisition will add five million customers, £34 billion in mortgages, and £35 billion in deposits to Santander’s portfolio, resulting in a combined customer base of 28m. The deal is expected to close in the first quarter of 2026, pending regulatory approval.

Commenting on the transaction, 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. It strengthens our franchise in a core market through the acquisition of a low-risk and complementary business that adds to our diversification.

“We are creating a stronger and more competitive business across key products such as personal current accounts where the combined business will become the second largest bank in the UK by market share. The transaction will accelerate our path to greater profitability in the UK and helps achieve a return on tangible equity of 16% by 2028.

“The acquisition also reflects our commitment to growing profitably through disciplined capital allocation. This acquisition meets our goal of achieving a return on investment above 20% and EPS accretion from year 1, while consuming limited capital and having low execution risk.”

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.

“At Santander UK we have momentum in our strategy to become the best bank for customers in the UK by investing in technology and service and improving our processes and efficiency. This deal accelerates our transformation allowing us to enhance our customer proposition and invest more in innovative products and our digital offering, supported by the human touch service so many appreciate, not least in our new branch formats and enhancements across the country. 

“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.”