The potential acquisition of other UK challenger banks by Spanish-based TSB owner Sabadell would have to be considered on its merits, SNP depute leader Stewart Hosie said today.

Speaking to The Scotsman, the Dundee MP suggested that there needed to be a balance of competition and pragmatism in the banking sector.

It comes after Sabadell chief executive Jaime Guardiola Romojaro, speaking in March, hinted towards growth opportunities for the Spanish company - saying that the UK challenger banking sector was “unconsolidated”.

NAB has confirmed it plans to demerge and float Clydesdale Bank and Yorkshire Bank on the stock market within a year, fuelling theories that Sabadell could move in.

For his part, Mr Hosie told the newspaper: “We want to see as much banking competition as we can on the high street.

“But banks need to be sufficiently large to be able to compete. There is a move to consolidation. Whether it was Clydesdale, Yorkshire Bank or RBS assets being sold off, we would have to consider every attempt on its merits.

“We want to see maximum competition, but banks need to be large enough to survive.”

Mr Hosie also reconfirmed the SNP’s support for a new 8 per cent surcharge on bank profits in the UK, but said the party wanted reassurances that it would not have the “unintended consequence” of benefiting Britain’s big four banks.