Banco Sabadell exits UK retail banking with TSB sale to Santander and shifts focus to core Spanish market growth

Banco Sabadell exits UK retail banking with TSB sale to Santander and shifts focus to core Spanish market growth

(IN BRIEF) Banco Sabadell has completed the sale of its UK subsidiary TSB to Banco Santander for approximately €3.3 billion, generating a capital gain of just over €300 million and strengthening its capital position by more than 400 basis points. The transaction includes the original £2.65 billion purchase price plus additional value generated prior to completion, and enables the bank to issue an extraordinary dividend of €0.50 per share on 29 May 2026. Executives highlighted the strategic benefits of the deal, allowing Sabadell to refocus on its core Spanish market while recognising TSB’s strong growth and performance since its acquisition in 2015. The sale also forms part of a broader plan to deliver around €6.45 billion in shareholder remuneration between 2025 and 2027, while maintaining a limited presence in the UK through corporate banking operations.

(PRESS RELEASE) ALICANTE, 1-May-2026 — /EuropaWire/ — Banco Sabadell has finalised the sale of its UK subsidiary TSB Bank to Banco Santander in a transaction valued at approximately €3.3 billion, following the receipt of all necessary regulatory approvals. The deal marks a significant milestone for the Group, delivering both capital gains and enabling enhanced shareholder returns.

The agreed purchase price of £2.65 billion (around €3.05 billion) reflects a valuation of roughly 1.5 times TSB’s book value. In addition, the final consideration includes £213 million (approximately €240 million) in tangible net asset value generated by TSB in the period leading up to completion, bringing the total proceeds to over €3.3 billion.

The transaction results in a capital gain of just over €300 million for Banco Sabadell and contributes more than 400 basis points to its capital position. This strengthened financial standing allows the bank to proceed with an extraordinary cash dividend of €0.50 per share, scheduled for distribution on 29 May 2026.

Chief Executive Officer César González-Bueno described the agreement as strategically beneficial for both institutions, highlighting that the timing supports immediate shareholder value while enabling Sabadell to sharpen its focus on its core market in Spain.

Marc Armengol, who is transitioning from his role as TSB’s CEO to become Banco Sabadell’s incoming CEO, emphasised the broader significance of the deal for the UK banking sector. He noted that TSB has evolved into a strong and competitive institution, underpinned by the efforts of its workforce over recent years.

The dividend forms part of a wider shareholder remuneration strategy, with Banco Sabadell targeting a total distribution of approximately €6.45 billion between 2025 and 2027. This includes regular dividends alongside share buyback and cancellation programmes.

Banco Sabadell originally acquired TSB in 2015 for £1.7 billion. Since then, the subsidiary has expanded its loan portfolio from £26.4 billion to £36.3 billion by the end of 2025, while significantly improving operational efficiency and profitability. Over the course of ownership, TSB has delivered more than €600 million in dividends back to the Group.

As part of the transaction, additional equity instruments and outstanding securities issued by TSB and underwritten by Banco Sabadell have been transferred to Santander UK for £1.217 billion.

Following completion, Banco Sabadell has agreed to a 24-month non-compete period in the UK retail banking market with Banco Santander. However, the Group will maintain a presence in the country through its existing branch network, continuing to support corporate clients in their international operations and operating via its Corporate and Investment Banking division.

This divestment represents a strategic realignment for Banco Sabadell, reinforcing its capital position while enabling a sharper focus on its domestic market and long-term growth priorities.

Media contact:
sabadellpress@bancsabadell.com

SOURCE: Banco de Sabadell, S.A.