TSB bank branches could leave the high street for good following a major business deal in a blow to millions of the financial institution’s customers.
Santander is understood to be retiring the name from physical branch locations following its acquisition of the UK retail lender.
This would effectively bring an end to a banking brand that is operated in the UK from around years.
The Spanish banking giant completed its £2.65billion takeover of TSB from Sabadell last week and intends to operate the merged business under the Santander UK banner once integration is finalised, The Financial Times reports.
Bank branch blow as TSB to leave UK high streets after 215 years after Santander deal
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GETTYThe acquisition brought Santander an extra five million customers and assets exceeding £45billion, while significantly strengthening its footprint in Scotland and northern England, regions where the bank had previously maintained only a modest presence.
TSB currently runs approximately 175 branches across the country and employs around 5,000 staff. Santander has indicated the deal will deliver roughly £400million in cost reductions, representing about 55 per cent of TSB’s existing cost base.
Executives at the Spanish lender have also explored the possibility of achieving a further £100million in savings beyond 2028 once the two banks are fully combined, according to people briefed on the discussions.
The TSB brand traces its heritage to 1810, when the first Trustee Savings Bank was founded in Dumfriesshire, Scotland, offering workers a means to manage their earnings.
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Numerous independent, community-focused TSBs subsequently emerged across Britain, eventually forming a loose national network.
During the 1980s, these regional institutions were consolidated into TSB Group, a shareholder-owned commercial bank that floated on the London Stock Exchange in 1986.
A merger with Lloyds Banking Group followed in 1995, creating Lloyds TSB. The 2008 financial crisis later forced Lloyds to spin off more than 600 branches as a standalone challenger bank under EU state aid rules.
Sabadell acquired TSB for £1.7billion in 2015.
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Customers need not worry about immediate disruption, with “one of the people familiar with Santander’s plans” confirming there would be no alterations to the TSB brand, accounts or products for a minimum of twelve months.
The TSB name may also persist for certain products sold through independent financial advisers for several years longer.
Santander acknowledged the lender’s heritage, stating that TSB was a “strong consumer banking brand and we recognise the value it has built with customers and within the UK market over a long time.
“We will consider carefully how to make the most of the brand value in our model long-term and expect no immediate changes.”