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Santander UK has completed its near £3 billion takeover of smaller rival TSB in what it said marks the single biggest investment in Britain’s banking sector for more than 15 years.
Spanish-owned Santander said the deal went through on Thursday after recently securing the green light from regulators in the UK and Europe.
It will see the combined group become the UK’s third biggest bank for current accounts and fourth for mortgages, with nearly 28 million customers nationwide.
Santander, which is owned by Banco Santander, said there would be no immediate change for customers of Santander or TSB, who can continue using their accounts and cards in the same way.
Mahesh Aditya, Santander UK’s new chief executive, said: “This is excellent news for UK banking, with the acquisition representing the single largest investment in the sector for over 15 years.
open image in gallery It will see the combined group become the UK’s third biggest bank for current accounts and fourth for mortgages, with nearly 28 million customers nationwide ( PA Archive )
“Bringing TSB into the Santander group strengthens competitiveness in the market and is an important step in creating the best bank for customers.”
Santander agreed a £2.65 billion buyout of TSB from Spanish banking group Sabadell last year, but said the final price paid rose to £2.9 billion on completion.
Nicola Bannister, who became chief executive of TSB on Friday, said: “Today marks a significant new chapter for TSB as we become part of Santander.
“I look forward to leading TSB as we combine the very best of these two great businesses.”
Santander is looking to achieve cost savings of at least £400 million following the acquisition.
The bank saw profits slump by 44% at the start of the year after it set aside nearly another £180 million for the motor finance mis-selling scandal.
The high street lending giant reported pre-tax profits of £202 million for the first quarter, down from £358 million a year ago.
Profits were knocked by an extra £179 million provision for motor finance compensation and increased costs in the first quarter, which brings its expected total bill so far for the saga to £633 million.