Tue, 17 Jun 2025 | BUSINESS SALE
Spanish bank Sabadell is exploring a sale of its British subsidiary TSB amid plans to retreat from the British banking market. Sabadell has reportedly put TSB up for sale after receiving interest from a number of potential bidders.
The potential sale comes amid a surge in dealmaking in the British baking sector. Recent deals include Nationwide’s £2.9bn takeover of Virgin Money in 2024 and Coventry Bank’s £780 million acquisition of Co-op Bank in January 2025.
More recently, Spanish lender Santander rejected an £11bn bid for its UK retail banking business from NatWest last month, while reports earlier this week indicated that Metro Bank was the subject of a bid from private equity firm Pollen Street Capital.
Find out more about what's driving increasing M&A activity within the UK banking sector
According to a report in the Financial Times, Sabadell has begun circulating documents to interested parties, as well as granting limited access to a data room in order to enable potential buyers to conduct due diligence.
On Wednesday, June 16, Sabadell confirmed that it has received approaches regarding TSB, saying it would “assess any potential binding offers”.
Sabadell originally acquired TSB from Lloyds Banking Group (which was forced to sell the bank off as part of a financial crisis rescue deal) in 2015 as it sought to establish a presence in the UK amid difficulties generating growth in its native Spanish market.
While Spain was, at the time, still feeling the effects of the 2008 financial crisis, the country has since recovered to establish itself as one of the UK’s fastest-growing economies. In 2024, the country expanded by 3.2 per cent, compared to just 1.1 per cent in the UK.
TSB generated pre-tax profits of £290.4 million in 2024, up by 22.4 per cent form 2023, paying a record £300 million dividend to Sabadell on the back of these results. Tracing its origins back to 1810, the bank has around five million UK customers and a mortgage book valued at over £33bn.
However, Sabadell is currently contending with a €12bn hostile bid from Spanish rival BBVA, leading to concerns over the place of TSB within an expanded Spanish bank. According to MorningStar analyst Johann Scholtz: “It makes sense for them dispose of the business as TSB has been a non-core business for a while”
Early reports have named NatWest, HSBC, Santander and Barclays as potential buyers, with all four seeking to strengthen their UK position.
Discussing the spate of dealmaking within the banking sector, Johann Scholtz commented: “European banks’ valuations have increased, so banking management teams are seeing less value in buying back their own shares and are looking for other avenues to deploy excess capital.”
“The whole M&A space in European banking is heating up with buyers now looking for obvious targets.”
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