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TSB’s Spanish owner mulls future of UK lender

Written by on 27/11/2020

TSB’s Spanish owner Sabadell has confirmed it is weighing up the future of the British lender – amid reports it could be sold.

It comes after Sabadell ended talks with larger rival BBVA over a merger.

The group said it would “analyse strategic alternatives for creating shareholder value” with its overseas assets, including TSB.

Sabadell bank
Image: Sabadell says its strategic plan will focus on its home market

It could mean the lender looking for a new owner after a turbulent few years under Sabadell’s ownership that saw an embarrassing IT meltdown in 2018.

The TSB brand was revived when it was spun out of Lloyds Banking Group and floated on the stock exchange before being taken over in 2015.

In September it announced plans to axe 969 jobs and close 164 branches, the latest in a series of cuts.

Sabadell said its new strategic plan would be set out in the first quarter of 2021, with the focus on its home market.

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It follows reports the bank has tasked Goldman Sachs with selling the loss-making TSB, although the investment firm Alantra said that this would be complicated “as Sabadell might be perceived as a forced seller”.

Sabadell has said it expects TSB to break even in 2021 after reporting a loss of £75m (€84m) in the third quarter.

Confirming that it would be launching “a transformation programme” in its retail banking business, the Spanish lender said in a statement: “Sabadell will also analyse strategic alternatives for creating shareholder value with regard to the group’s international assets, including TSB.”

BBVA and Sabadell had been looking to create Spain’s second-biggest domestic bank with almost €600bn (£539bn) in assets.

But just two days after announcing talks, the banks confirmed they were over.

Sources said the deal was called off so quickly because BBVA was forced to acknowledge interest in Sabadell
after announcing the sale of its US division, but that it had not been ready to enter serious talks.

Sabadell shares fell 12% after rising almost 20% following the news of a potential tie-up.

 Sky News

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