Santander completes £2.65bn takeover of TSB to create Britain’s third largest financial institution

Santander has today completed its £2.65billion takeover of TSB to create the country’s third largest bank.

Spanish-owned Santander said the deal went through on Thursday after getting the green light from regulators in the UK and Europe.

TSB was sold by its Spanish owner Sabadell to rival Santander in a deal worth £2.65billion last summer.

The deal will see the combined group become the country’s third biggest bank for current accounts and fourth for mortgages, with nearly 28million customers.

The TSB brand could disappear from the High Street following completion of the deal

In a statement this morning, Santander said it would integrate the two banks through a ‘Part VII transfer’ in the first half of 2027.

The completion of this legal process means a lender can move all of its customers, accounts, and contracts to another bank without needing to ask every single customer for individual permission.

That will prompt fears that the TSB brand disappears entirely from the High Street – something Santander boss Ana Botin has previously hinted at.

Santander said today that there would be no immediate change for customers of either bank, who can continue using their accounts and cards in the same way.

Mahesh Aditya, Santander UK’s new chief executive, said: ‘This is excellent news for UK banking, with the acquisition representing the single largest investment in the sector for over 15 years.

‘Bringing TSB into the Santander group strengthens competitiveness in the market and is an important step in creating the best bank for customers.’

It is the latest confirmed deal in the banking sector, after Nationwide recently announced it had transferred nearly all of Clydesdale’s operations (trading as Virgin Money).

Earlier this week, Santander reported a slump in profits as it set aside a further £179million for the motor finance scandal, after the Financial Conduct Authority revealed details of its compensation scheme.

Pre-tax profits dropped 44 per cent to £202million in the three months to 31 March, down from £358million in the same period a year ago.