Santander UK has completed its near £3 billion takeover of smaller rival TSB, in what it describes as the single biggest investment in Britain's banking sector for more than 15 years.
Spanish-owned Santander confirmed the deal went through on Thursday after recently securing regulatory approval from authorities in the UK and Europe. The acquisition will create a combined group that becomes the UK's third largest bank for current accounts and fourth largest for mortgages, serving nearly 28 million customers nationwide.
Santander, owned by Banco Santander, assured customers of both banks that there will be no immediate changes. Account holders can continue using their existing accounts and cards as usual.
Leadership comments on the acquisition
Mahesh Aditya, Santander UK's new chief executive, stated: "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 initially agreed a £2.65 billion buyout of TSB from Spanish banking group Sabadell last year, but the final price rose to £2.9 billion upon 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."
Cost savings and financial outlook
Santander is targeting cost savings of at least £400 million following the acquisition. However, the bank recently reported a 44% slump in profits for the first quarter, after setting aside nearly another £180 million for the motor finance mis-selling scandal.
High street lending giant Santander reported pre-tax profits of £202 million for the first quarter, down from £358 million a year earlier. Profits were impacted by an additional £179 million provision for motor finance compensation and increased costs, bringing its total expected bill for the saga to £633 million.
