Historic Scottish-founded TSB name could disappear after £2.65bn Santander swoop

The venerable TSB brand could vanish from UK high streets in the wake of Santander’s £2.65 billion deal to buy the Scottish-founded lender, amid fears of further branch closures and job losses.

Sabadell, the current Spanish owner of TSB, said last month it was considering a sale of the UK business amid efforts to stop itself being subject to a hostile takeover. Santander, also Spanish owned, confirmed that it “intends to integrate TSB in the Santander Group” as part of the deal, which needs to be agreed at a shareholder vote.

The move would create the UK’s third largest bank by the number of personal current accounts. When combined, the two banks would serve nearly 28 million retail and business customers nationwide.

TSB currently operates about 175 branches across the UK and employs more than 5,000 people.

TSB operates about 175 branches across the UK and employs more than 5,000 people, while rival Santander runs 349 branches and has around 18,000 staff. Like all major lenders, both banking groups have cut their number of sites in recent years as many customers have shifted to online banking and using apps.

The takeover deal will raise fears of further job cuts and branch closures across the combined group.

Nick Sherrard, managing director of Label Sessions, said: “Inevitably, a lot of the focus in the next few weeks will be on the demise of the TSB brand, but there are lots of strengths the bank has which Santander should be careful not to lose. A lot has happened since TSB’s infamous tech issues, and its Labs programme is one of the most successful in Europe for fostering real collaboration with fintechs. For Scotland’s fintech scene, there should be some reflection.

“Only a few years ago we had an array of financial services businesses headquartered and making decisions here. This will now be another story of office job losses as well as branch closures.”

TSB, formerly the Trustee Savings Bank, was founded by the Reverend Henry Duncan in Dumfriesshire in 1810. It retains a Scottish headquarters in the centre of Edinburgh.

In a presentation to analysts, Santander said it plans a “rationalisation” of the overall branch network and structure, with aims to look at “overlaps” involving properties.

It comes a decade after Sabadell bought TSB for £1.7bn to gain a foothold in the UK, a year after Lloyds Banking Group had spun off TSB in a stock market float.

In May, TSB saw first-quarter profits nearly double thanks to cost-cutting and improved mortgage lending ahead of April's stamp duty deadline.

Marc Armengol, TSB chief executive, said: “TSB is a truly special bank, run by a first-class team that delivers trusted service and support for customers, day in and day out. Today’s announcement represents the next exciting chapter for this successful business, as part of Santander, a highly regarded banking group.

“I believe this will prove to be an excellent fit for our loyal customers,” he added.

Ana Botin, Banco Santander’s executive chairwoman, said: “The acquisition of TSB represents a continuing strategic commitment to our customers in the UK, offering a compelling opportunity that is financially attractive to our shareholders and aligned with Santander’s long-term objectives. It strengthens our franchise in a core market through the acquisition of a low-risk and complementary business that adds to our diversification.”

Santander said the transaction is expected to generate “cost synergies” - or savings - of 13 per cent of the combined business’s cost base, equivalent to at least £400 million pre-tax, with the majority realised by 2027. Santander expects to incur £520m of pre-tax restructuring costs during 2026 and 2027.

At group level, the transaction would be accretive to earnings per share from the first year, the bank added.

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