Banco Sabadell has received expressions of interest for its British unit, TSB, according to sources close to the matter. The Spanish bank plans to assess any potential binding offer that may arise from these expressions of interest. Sabadell emphasized that any transaction involving the sale of TSB would comply with all legal obligations.
The move comes as Sabadell continues to explore strategic options to bolster its financial stability and focus on core markets. TSB, one of Britain’s biggest high street banks and mortgage lenders, has been put up for sale by its Spanish owner, Banco Sabadell. The move comes as Sabadell fights off an €11 billion (£9.4 billion) hostile takeover bid from its Spanish rival, BBVA.
Potential UK bidders for the high street bank include Barclays, Santander, and HSBC. TSB boasts more than 5 million customers, about 5,000 staff, and 175 branches across the UK. Any offer for the bank would require shareholder approval and could take time to finalize.
The primary driver is BBVA’s drawn-out attempt to take over Sabadell. Selling TSB could raise significant capital, which Sabadell could use to reward shareholders and make itself a tougher target for BBVA. If BBVA succeeds in acquiring Sabadell, it is likely that TSB would be sold in any case.
Sabadell had originally bought TSB from Lloyds Banking Group for £1.75 billion in 2015. TSB has reassured its customers that, for now, it’s “business as usual” and that they should not need to do anything differently.
Sabadell explores options for TSB sale
The bank pledged to remain a UK-based entity and will continue to be covered by the Financial Services Compensation Scheme (FSCS), which protects deposits of up to £85,000 if the firm holding your money fails. If TSB were sold, current accounts would likely be switched to the new owner. Those unhappy with any changes could easily move banks using the Current Account Switch Service, which promises to transfer customer deposits, direct debits, and standing orders within seven days.
By the end of 2023, TSB had £33.9 billion worth of mortgage lending on its books, according to UK Finance. While changes in ownership can be worrying for borrowers, it’s not unusual—TSB went through this process during its last sale in 2015. The Bank of England and the Financial Conduct Authority would oversee any transition to ensure customer protection.
A new owner could change interest rates offered to new borrowers, but those on fixed-rate mortgages would remain on the same terms until their deals expired. Last year, TSB reported pre-tax profits of £285.1 million on an income of £1.14 billion, up 21.1 percent from £235.5 million in 2023. The bank had total assets of £46.1 billion at the end of 2024.
NatWest Group has confirmed it will not be making a bid for TSB, quashing recent speculation about a potential acquisition. The decision follows discussions within the banking group about strategic opportunities and market positioning. A spokesperson for NatWest stated, “After careful consideration, we have decided not to pursue a bid for TSB.
We remain committed to our current strategy and believe it is in the best interest of our shareholders and customers.”
This move allows NatWest to focus on its existing operations and strategic goals, including enhancing digital services and customer experience. Meanwhile, TSB continues to work on its independent growth plans. The sale of TSB might bring changes, but it also presents opportunities for enhanced services and strengthened financial stability for both customers and shareholders.
