Santander acquires TSB in £2.6bn deal, reshaping UK banking landscape
Spanish bank Sabadell has agreed to sell TSB to Santander UK in a £2.6 billion deal. The acquisition, set to finish in early 2026, will bring five million new customers and £69 billion in combined assets to Santander. TSB's latest financial results show strong growth, with profits rising by over 20% in 2025.
TSB reported a pre-tax profit of £350.4 million for 2025, up 20.7% from the previous year. The bank's total income also grew by 3.6%, reaching £1.2 billion, helped by its structural hedge strategy. Operational costs fell by 4.4% to £786 million, though the cost-to-income ratio rose slightly from 66.4% to 71.9%. Meanwhile, its net interest margin improved from 2.68% to 2.89%.
Under the deal, TSB's 218 branches will join Santander's network, which currently stands at 305 locations. Santander has already announced plans to close 44 branches in January 2026, but it remains unclear how many TSB sites will keep their branding after the takeover. The acquisition will also transfer £34 billion in mortgages and £35 billion in deposits to Santander.
Marc Armengol, TSB's current chief executive, will leave the bank to become CEO of Sabadell once the sale completes. The transition is expected to wrap up in the first half of 2026, pending regulatory approvals.
The deal will expand Santander's customer base by five million and add significant mortgage and deposit holdings. TSB's recent financial performance highlights its profitability, though the future of its branch network under Santander remains undecided. The acquisition marks a major shift in the UK banking sector, with completion anticipated in early 2026.
