By Henry Saker-Clark
The TSB brand could vanish from UK high streets after rival Santander agreed to buy the lender for 拢2.65 billion, amid fears the deal could lead to branch closures.
Sabadell, the 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 said it 鈥渋ntends to integrate TSB in the Santander Group鈥 as part of the deal, which needs to be agreed at a shareholder vote.
The move would create the UK鈥檚 third largest bank by the number of personal current accounts.
TSB runs around 175 branches across the UK and employs more than 5,000 people, while rival Santander runs 349 branches and has around 18,000 staff.
Both lenders have cut their number of sites in recent years as many customers have shifted to online banking.
The deal will raise fears of further job cuts and branch closures across the combined group.
In a presentation to analysts, Santander said it plans a 鈥渞ationalisation鈥 of the overall branch network and structure, with aims to look at 鈥渙verlaps鈥 involving properties.
It comes a decade after Sabadell bought TSB for 拢1.7 billion to gain a foothold in the UK, a year after Lloyds 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鈥檚 stamp duty deadline.
Marc Armengol, TSB chief executive, said: 鈥淭SB is a truly special bank, run by a first-class team that deliver trusted service and support for customers, day in and day out.
鈥淭oday鈥檚 announcement represents the next exciting chapter for this successful business, as part of Santander, a highly regarded banking group.
鈥淚 believe this will prove to be an excellent fit for our loyal customers.鈥
Ana Botin, Banco Santander鈥檚 executive chairwoman, said: 鈥淭he 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鈥檚 long-term objectives.
鈥淚t strengthens our franchise in a core market through the acquisition of a low-risk and complementary business that adds to our diversification.鈥