TSB’s Spanish takeover complete

The backing of the Financial Conduct Authority and Prudential Regulation Authority comes a year after TSB was spun out of bailed-out Lloyds Banking Group under orders from European regulators.

TSB currently has around 4.7 million customers and 181 of its 685 branches in Scotland.

The move is expected to bring more competition to the UK’s “big five” lenders – Lloyds Banking Group, Royal Bank of Scotland, Barclays, HSBC and the UK arm of Santander.

Together, the “Big 5” control more than 80 per cent of personal current accounts in the UK.

Sabadell, Spain’s fifth largest bank, announced that the PRA and the FCA had approved the deal, which effectively completes the sale by Lloyds Banking Group of its remaining 40 per cent stake in TSB for about £680m.

Although the offer period is still open, there are already enough shareholder approvals for the deal to go through.

Commenting on the news, Sabadell Chairman Josep Oliu said: “This is a milestone that enables us to enter a market with vast opportunities.”

TSB chief executive Paul Pester added: “With the extra firepower and fresh perspective of Sabadell, TSB will be stronger and even better placed to build on its position as Britain’s challenger bank.”