Banco Sabadell shareholders have voted overwhelmingly in favour of selling its British subsidiary, TSB, to Banco Santander for at least £2.65 billion, marking a significant shift in the Spanish bank’s international strategy.

At an extraordinary general meeting held on Wednesday, 99.6 per cent of Sabadell shareholders approved the deal, which is expected to close in the first quarter of 2026, subject to regulatory approval from UK and European authorities. Sabadell bought TSB in 2015 for £1.7 billion, making the sale a notable gain for the bank. The transaction will see Santander become the owner of TSB, a brand that has been present in the UK for over 200 years, and is set to create the UK’s third largest bank by the number of personal current accounts.

The move comes as Sabadell faces a hostile takeover bid from rival Spanish lender BBVA, which has valued Sabadell at around €15 billion following an initial offer last year. While Sabadell’s board has consistently opposed the bid, the sale of TSB is widely seen as a defensive measure to strengthen the bank’s independent position and simplify its business.

“The proposed sale of TSB was independent of BBVA’s takeover bid and would have happened regardless because of the clear benefits to the bank and its shareholders,” said Sabadell chairman Josep Oliu.

Oliu told shareholders the deal would allow Sabadell to focus on the Spanish market, “where the bank has a greater growth capacity”.

The sale includes an initial payment of €3.098 billion, with the final price potentially reaching €3.361 billion depending on TSB’s performance. An extraordinary dividend of €2.5 billion will be distributed to shareholders who remain with Sabadell and do not accept BBVA’s offer, further complicating the takeover attempt.

The deal also comes against a backdrop of political controversy in Spain, with the government and European Commission weighing in on the proposed BBVA-Sabadell merger. For now, Sabadell’s management remains committed to charting its own course, with the TSB sale seen as a pivotal step in that direction.

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