High street bank Santander has agreed to purchase rival TSB for £2.65 billion, sparking concerns over potential job losses and further branch closures. If approved, the merger would result in Britain’s second largest bank by personal current account balances.
Together, they would serve nearly 28 million retail and business customers across the nation – but the hefty deal is expected to lead to significant cost cutting, with Santander setting aside at least £400 million for “cost synergies”, primarily by 2027.
TSB, the UK’s seventh largest bank with 175 branches, also boasts a growing online division, with headquarters in Edinburgh and London, reports the Mirror. It serves approximately five million customers, mainly in personal and small business sectors, with £34 billion in mortgages (a 2 per cent market share in the UK) and £35 billion in deposits.
Spanish-owned Santander currently operates around 350 branches in the UK, a figure that has significantly decreased due to widespread closures, and employs 18,000 full-time equivalent staff.
Santander assured that the deal isn’t set to finalise until next year and, even then, any affected staff would be informed directly “as is right and proper. But for now it is business as usual.” However, it conceded that it wouldn’t make sense to have two branches of the same bank in close proximity, fuelling fears of more branch closures.
In the meantime, no decisions of this nature have been made yet and will be some way off, offering at least some respite for staff who are understandably worried.
A Santander spokesperson said: “At the moment nothing changes with branches. It is true, however, that the way customers are choosing to bank is changing and all banks are currently undergoing a programme of transformation that reflects this.”
There’s also no certainty that the TSB name, with its origins dating back to 1810, will remain a fixture on high streets following any takeover. On the future of the TSB brand, a Santander spokesperson informed the BBC: “This kind of detail will be provided once the deal is completed.”
TSB, currently owned by Spain’s Banco Sabadell, could be heading for new ownership as it looks to fend off a hostile bid from fellow Spanish giant, BBVA. Sabadell has announced plans to present the sale to their shareholders for approval at a meeting scheduled for August 6. The potential valuation of the deal could see figures reaching up to £2.9 billion, taking into account TSB’s expected profits until the completion of the transaction, which is projected for the first quarter of 2026.
Ana Botín, executive chair at Banco Santander, 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.”
Mike Regnier, chief executive of Santander UK, stated: “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.”
Marc Armengol, TSB chief executive, commented: “TSB is a truly special bank, run by a first-class team that deliver trusted service and support for customers, day in and day out. Today’s announcement represents the next exciting chapter for this successful business, as part of Santander, a highly regarded banking group. I believe this will prove to be an excellent fit for our loyal customers.”
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