• Santander agrees to acquire TSB for £2.65 billion, expanding UK presence
• Deal positions Santander as the UK’s fourth-largest mortgage lender
• TSB adds £35bn in deposits and five million customers
• Santander UK will become the third-largest in personal current accounts
• Banco Sabadell seeks capital amid BBVA takeover pressure
• Shareholder vote set for August 6, with deal expected to close in early 2026
• Deal could rise to £2.9bn based on TSB’s projected profits
• Santander continuesthe  trend of UK acquisitions following Abbey and Alliance & Leicester
• Move refutes early-year speculation of UK exit
• TSB last sold in 2015 for £1.7bn by Lloyds

Santander has struck a £2.65 billion deal to acquire TSB from Banco Sabadell, solidifying its place among the largest players in UK retail banking and vaulting it into the number four spot in home lending. The transaction, confirmed on Monday evening, will see Santander absorb TSB’s five million customers, £35 billion in deposits, and £34 billion mortgage book into its UK operations.

The Spanish banking group says the acquisition strengthens its position in a core market and adds scale, diversification, and operational efficiency to its UK business. Once completed, Santander UK will become the third-largest provider of personal current accounts and the fourth-biggest mortgage lender in the country. Santander currently holds £167.2 billion in UK mortgage lending and £183.4 billion in customer deposits, compared to TSB’s smaller but still significant figures.

Ana Botín, Executive Chair of Banco Santander, described the deal as a strategic move to acquire “a low-risk and complementary business,” adding that it enhances the group’s ability to grow in a profitable and diversified way. Santander UK’s chief executive Mike Regnier said the deal will help accelerate the bank’s transformation by boosting its digital capabilities and customer offering.

Banco Sabadell’s decision to offload TSB comes as the Spanish lender seeks to raise capital while resisting an €11 billion hostile takeover attempt by rival BBVA. Sabadell Chairman Josep Oliu said the sale creates value and will allow the company to issue a special dividend to shareholders. A vote on the sale is scheduled for August 6, with the transaction expected to close in the first quarter of 2026, pending regulatory and shareholder approval.

The value of the deal could rise to £2.9 billion based on TSB’s projected future profits, according to Sabadell. The British bank has 218 branches and a 2 percent share of the UK mortgage market. Its CEO, Marc Armengol, welcomed the sale, calling it “the next exciting chapter for this successful business.”

Santander has a history of strategic acquisitions in the UK banking sector, having previously bought and integrated Abbey, Bradford & Bingley, and Alliance & Leicester. The TSB acquisition adds another major high street name to that list and appears to counter early-year speculation that Santander might exit the UK market due to regulatory ringfencing costs. Botín dismissed those rumors in February, saying the UK business was “not for sale”—a position now reaffirmed by this major investment.

TSB was last sold in 2015 when Banco Sabadell purchased it from Lloyds Banking Group for £1.7 billion. A decade later, the deal with Santander marks a significant return on investment for Sabadell, while giving Santander deeper access to the UK’s low-risk mortgage market and a broadened customer base.