The familiar TSB brand could disappear from UK high streets following a £2.65 billion agreement for rival Santander to acquire the lender, a move that has sparked concerns over potential branch closures.
The deal, which requires a shareholder vote, would see Santander integrate TSB into its existing group, creating the UK's third-largest bank by personal current accounts.
TSB's Spanish owner, Sabadell, had indicated last month it was exploring a sale of its UK operations as part of efforts to fend off a potential hostile takeover.
TSB runs around 175 branches across the UK and employs more than 5,000 people, while rival Santander runs 349 branches and has around 18,000 staff.
Both lenders have cut their number of sites in recent years as many customers have shifted to online banking.
The deal will raise fears of further job cuts and branch closures across the combined group.
In a presentation to analysts, Santander said it plans a “rationalisation” of the overall branch network and structure, with aims to look at “overlaps” involving properties.
It comes a decade after Sabadell bought TSB for £1.7 billion to gain a foothold in the UK, a year after Lloyds had spun off TSB in a stock market float.
In May, TSB saw first-quarter profits nearly double thanks to cost-cutting and improved mortgage lending ahead of April’s stamp duty deadline.
Marc Armengol, TSB chief executive, said: “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.”
Ana Botin, Banco Santander’s executive chairwoman, 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.”
This article was written by Henry Saker-Clark from The Independent and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to legal@industrydive.com.