Banco de Sabadell SA on Tuesday confirmed it has received interest from prospective buyers of its UK division TSB Banking Group PLC.
In a brief statement, the Catalonia-based lender said it had received ‘preliminary non-binding expressions of interest’ for TSB from unnamed bidders, and will assess any potential binding offer.
‘Any transaction would be subject to the satisfaction of all legal obligations,’ the bank added.
Sabadell acquired TSB from Lloyds Banking Group PLC for £1.7 billion in 2015. At the time, the lender wanted to expand outside Spain.
However, the lender, founded in 1881, has been locked in a prolonged takeover battle with Banco Bilbao Vizcaya Argentaria SA for more than a year, casting uncertainty over TSB‘s future.
Late Monday, the Financial Times said Sabadell had received unsolicited interest in TSB from multiple parties.
The FT named potential bidders as Barclays PLC, NatWest Group PLC, the UK arm of Banco Santander SA and HSBC Holdings PLC.
Banking analysts at Citi said ‘a purchase of TSB by any of the major UK incumbent domestic banks would be seen as a useful bolt-on, yet with questions to surround execution risk, particularly around IT migration.’
The broker said a deal will add scale in mortgages while only consuming 30 to 80 basis points of capital for an incremental 1% to 5% earnings uplift pre-synergies.
TSB reported a statutory pretax profit of £290.4 million for 2024 up 22% from £237.2 million in 2023, on income of £1.14 billion, down 1.4% year-on-year from £1.16 billion.
Customer deposits totalled £35.05 billion in 2024 with loans of £36.33 billion.
According to its website, TSB has more than 5 million customers.
The potential sale of TSB is the latest in a flurry of recent dealmaking moves in the UK banking sector.
On Monday, Metro Bank Holdings PLC shares jumped after reports it had attracted a takeover approach from investment firm Pollen Street Capital Ltd.
Meanwhile, Santander has reportedly rejected bids from NatWest and Barclays to buy its UK retail bank.
Shares in Sabadell fell 1.6% to €2.79 in Madrid on Tuesday morning.
In London, Barclays was 0.9% lower at 322.65 pence, Lloyds was 0.8% lower at 76.56p, HSBC 1.1% lower at 866.20p and NatWest 1.0% lower at 518.80p.
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