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Santander UK has completed its purchase of TSB from Sabadell, after the clearance from the Prudential Regulation Authority and the European Central Bank.
The cash deal, which was initially signed in July 2025 and valued at £2.65bn ($3.6bn), is intended to support Santander UK’s aim of raising return on tangible equity to 16% by 2028.
It also carries projected cost synergies of at least £400m.
After the acquisition, Santander UK ranks as the UK’s third largest bank by personal current account balances and fourth in the mortgage market, the bank said in a statement.
Santander UK CEO Mahesh Aditya said: “This is excellent news for UK banking with the acquisition representing the single largest investment in the sector for over 15 years. Bringing TSB into the Santander group strengthens competitiveness in the market and is an important step in creating the best bank for customers.”
For customers of both banks, there is no immediate change, with existing products, accounts and cards continuing to operate as before.
Together, Santander UK and TSB now serve close to 28 million retail and business customers across the country.
TSB holds about five million customer accounts and roughly £71.5bn in gross customer assets, made up of £35.2bn in customer deposits and £36.3bn in customer lending.
TSB CEO Nicola Bannister commented: “Today marks a significant new chapter for TSB as we become part of Santander. I look forward to leading TSB as we combine the very best of these two great businesses to offer even better banking for our customers.”
For Banco Sabadell, the sale delivers a capital gain of more than 400 basis points and slightly over €300m.
Banco Sabadell bought TSB in 2015 at a carrying value of £1.7bn.
By the end of 2025, the bank’s loan book had increased from £26.4bn to £36.3bn.
Over the past ten years, Banco Sabadell has received more than €600m in dividends from the unit.
As part of the agreement, Banco Sabadell will not compete in the UK market with Banco Santander for 24 months after completion.
It will keep its UK branch, which supports companies in their overseas operations, and will remain active in the market through its Corporate and Investment Banking division.
Banco Sabadell CEO César González-Bueno, highlighted that “it is a great transaction that is compelling for both parties. Furthermore, the timing is highly favourable, enabling the distribution of an extraordinary dividend of 50 euro cents per share and allowing the Bank to focus its strategy on Spain, our natural market.”
“Santander UK closes £2.65bn purchase of TSB from Sabadell” was originally created and published by Retail Banker International, a GlobalData owned brand.