Santander UK has completed its near £3 billion takeover of smaller rival TSB, marking what it calls the single biggest investment in Britain's banking sector for more than 15 years. The deal, which received regulatory approval from UK and European authorities, went through on Thursday.
The combined group will become the UK's third largest bank for current accounts and fourth for mortgages, serving nearly 28 million customers nationwide. Santander, owned by Banco Santander, said there would be no immediate changes for customers of either bank.
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. Bringing TSB into the Santander group strengthens competitiveness in the market and is an important step in creating the best bank for customers.'
Santander originally agreed a £2.65 billion buyout of TSB from Spanish banking group Sabadell last year, but the final price 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.'
The bank is targeting cost savings of at least £400 million following the acquisition. This comes as Santander reported a 44% slump in first-quarter profits to £202 million, partly due to an extra £179 million provision for the motor finance mis-selling scandal, bringing its total expected bill to £633 million.
