Santander said Tuesday that it has agreed an all-cash deal to acquire TSB from Banco de Sabadell for £2.65 billion, strengthening its position in the UK retail banking market.
Santander to Acquire TSB from Sabadell in £2.65 Billion Deal
The deal will see TSB integrated into the Santander UK group, making it the third-largest bank in the UK by personal current account balances. It would also be the fourth largest when it comes to mortgages.
Santander said the acquisition values TSB at 5x projected 2026 earnings after synergies and 1.45x tangible book value as of 31 March.
“The acquisition of TSB represents a continuing strategic commitment to our customers in the UK,” said Ana Botín, Banco Santander’s executive chair, calling the deal “financially attractive” and aligned with long-term goals.
The deal is expected to deliver a return on investment of over 20% and increase Santander UK’s return on tangible equity from 11% in 2024 to 16% by 2028.
It also brings anticipated cost synergies of at least £400 million, equivalent to 13% of the combined cost base.
Santander UK CEO Mike Regnier described the move as “an excellent deal for customers,” creating one of the most substantial banks in the country.
TSB, which serves 5 million customers and holds £34 billion in mortgages, will add to Santander’s reach, helping the combined group serve nearly 28 million customers. The deal is expected to be completed in the first quarter of 2026, pending regulatory and shareholder approvals.
