- The all-cash transaction values TSB at 5x 2026 earnings post identified cost synergies and 1.45x tangible book value as of 31 March 2025.
- The acquisition would strengthen Santander’s position in the UK. Santander intends to integrate TSB in the Santander UK group, enabling it to become the third largest bank in the country by personal current account balances.
- The transaction is expected to generate a return on invested capital of over 20%, thereby contributing to an increase in Santander UK’s return on tangible equity from 11% in 2024 to 16% in 2028, in line with leading UK peers, with cost synergies of at least £400 million or 13% of the combined business’s cost base.
- The acquisition is expected to result in earnings per share accretion for Santander from the first year and of c.4% in 2028 while consuming 50 basis points of CET1 capital at closing. The transaction is consistent with Santander’s strategy to carry out bolt-on acquisitions to accelerate organic growth in its core markets while adhering to Santander’s strict capital hierarchy.
- The transaction will not affect Santander’s distribution policy and 2025 targets. The group remains on track to deliver at least €10 billion in share buybacks from 2025 and 2026 earnings and excess capital over an accelerated timetable than originally planned.
Santander announces that it has reached an agreement to acquire 100% of TSB Banking Group plc (TSB) from Banco de Sabadell, S.A. (Sabadell), with a valuation of £2.65 billion ($3.6bn) in an all-cash transaction.
TSB is a well-established UK retail bank with a nationwide network of 218 branches and outlets, and a growing digital presence. It serves approximately 5 million customers, primarily in the personal and small business segments, with £34 billion in mortgages (2% market share in the UK) and £35 billion in deposits.
The acquisition further strengthens Santander’s position in one of its core markets, expanding its customer base and lending capacity across the UK. Santander UK would become the third largest bank in the country by personal current account balances and number four in mortgages. When combined, the two banks would serve nearly 28 million retail and business customers nationwide, giving TSB customers access to Santander’s international network and allowing them to benefit from the group’s technology platforms.