BARCELONA: Banco Sabadell’s board agreed Tuesday to propose the sale of its British subsidiary, TSB, to Banco Santander for £2.9 billion (€3.4 billion) in cash, with the deal expected to close in the first quarter of 2026.
The Spanish bank said it will recommend an extraordinary cash dividend of €0.50 per share, totaling about €2.5 billion, at its general shareholders’ meeting on Aug. 6 in Sabadell.
Chairman Josep Oliu called the sale “beneficial for the bank and its shareholders,” saying it would allow the bank to distribute the dividend while keeping its capital ratio above 13%. He emphasized that the deal would proceed regardless of the outcome of BBVA’s ongoing takeover bid for Sabadell.
“Banco Sabadell is a bank with a clear focus on Spain,” Oliu said, citing its strong dividend yield and share performance.
CEO César González-Bueno described the sale as a “strategic opportunity,” noting that TSB was sold at 1.5 times its book value. The bank will now concentrate on its Spanish operations, where it sees growth potential.
The €0.50-per-share dividend will be paid upon completion of the sale. Sabadell expects to maintain a 13% capital ratio after the payout. If BBVA’s takeover succeeds, BBVA would receive the dividend like other shareholders, without affecting the bid’s terms.
Combined with an expected €1.3 billion ordinary dividend from 2025 earnings, total shareholder remuneration would reach €3.8 billion.
Sabadell bought TSB in 2015 for £1.7 billion. Since then, TSB’s loan book grew to £36.4 billion, and its return on equity rose to 12.5%. The sale includes £1.45 billion in transferred debt securities.
Sabadell agreed not to compete in the U.K. for two years but will retain a branch to support international business clients.
TSB CEO Marc Armengol said the move opens “a new chapter” for the bank under Santander.