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Santander has agreed to buy the British High Street Lender TSB for 2.65 billion GBP in order to only use the commitment of the Spanish bank for its British retail operation months after the granting of offers for the company.
Santander beat his British rival Barclays, which also had a formal offer for the unit in Sabadell, according to the people familiar with the matter.
The deal comes when Sabadell, who bought TSB for 1.7 billion GBP in 2015, wants to hand over an enemy approach of € 11 billion from its domestic rival BBVA.
Sabadell started the tendering process for TSB after receiving unwanted interest rates for the business, as the Financial Times announced last month.
The move was regarded by the observers of industry as a deterrent for a takeover of BBVA, which last May launched its hostile offer for Sabadell, which has been taken in Spain’s poorly driven takeover saga for years.
Santander’s successful offer for TSB will increase the British market share of the Spanish lender and takes place after a time of uncertainty about its future in Great Britain, in which the bank has shortened thousands of jobs. His British chairman also announced his departure at the beginning of this year after disagreements with the leadership of the group.
Santander last year maintain commandments of Both Natwest and Barclays for his British retail arm, however, rejected the offers due to disagreements about the price, the FT reported before.
The bank’s Spanish managers had become frustrated with the weaker returns in their British business compared to their other markets and the high cost base of the unit.
“We didn’t want to sell the British business, but we had offers,” said a person familiar with the matter. “This is the better result and will enable it to tackle your British problems … and accelerate growth.”
At the beginning of this year, Santander sold a large part of its Polish operations for around 7 billion euros to the Austrian Bank Erste Group and promised to use half of the cash to buy back their own stocks.
BBVA has never been clear about his plans for Sabadell, but it was generally expected to bring it to the market when it succeeds in buying his Spanish rival. However, the Spanish government was raised a significant setback last week, which would block a legal merger between the banks for at least three years.
Since Sabadell is currently the subject of a takeover offer, his board of directors is bound to a “passivity obligation”, which means that the agreed transaction is presented to investors for approval in an extraordinary general meeting of shareholders.
The chairman of Sabadell, Josep Oliu, said: “This transaction is an advantage for the bank and its shareholders because it creates a significant value and enables us to pay an extraordinary dividend.”
Santander said the combination would offer shareholders through increased scale, higher access to mortgages with low risk and high -quality deposits and operating efficiency for considerable value.
Ana Botín, the bank’s executive chair, added: “The transaction will accelerate our way to greater profitability in Great Britain and helps to achieve a tangible return on equity by 2028.” The unit achieved tangible equity – a measure of profitability – of 11 percent in 2024.
Last year, TSB reported a profit before GBP 285 million for income of 1.14 billion GBP and had a total assets of 46.1 billion GBP at the end of 2024. The bank has around 5 million customers in the UK.
