The TSB name could vanish from British high streets following a £2.65 billion agreement for the UK lender to be acquired by rival Santander.

Announced by TSB’s Spanish owner Banco Sabadell, the proposed deal remains subject to shareholder approval and regulatory sign-off. But if completed, it would see TSB fully absorbed into Santander UK – a move that would create the country’s third-largest bank by personal current account share.

The deal is expected to close in the first quarter of 2026. Sabadell said the final price could rise to £2.9bn depending on TSB’s performance up to completion.

TSB CEO Marc Armengol called the agreement “the next exciting chapter for this successful business,” describing Santander as “a highly regarded banking group” and “an excellent fit” for TSB’s customers.

Santander executive chair Ana Botín said the deal demonstrated the Spanish bank’s “strategic commitment to our customers in the UK”, adding that it was “financially attractive” and aligned with Santander’s long-term goals.

She added: “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.

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“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.

“Furthermore, the transaction will not affect Santander’s existing distribution policy and 2025 targets.”

Image source: TSB media library.