Private equity firms approach Sabadell about buying TSB

Private equity firms have approached Sabadell about buying TSB from the Spanish bank. 

It is understood that NewDay, a credit card provider, looked at a possible merger with TSB earlier this year. It is not known if NewDay is still interested. 

Sabadell, which bought TSB in 2015 for £1.7billion, said last week that it was exploring options for its foreign assets, including the UK bank. It came as Sabadell’s merger talks with its Spanish rival BBVA fell through. 

Writing on the wall?: Sabadell, which bought TSB in 2015 for £1.7billion, said last week that it was exploring options for its foreign assets, including the UK bank

Writing on the wall?: Sabadell, which bought TSB in 2015 for £1.7billion, said last week that it was exploring options for its foreign assets, including the UK bank

Writing on the wall?: Sabadell, which bought TSB in 2015 for £1.7billion, said last week that it was exploring options for its foreign assets, including the UK bank

One analyst said TSB was ‘undervalued by the market’ and said Sabadell could sell the entire bank or parts of it, such as its mortgage book. 

Private equity firms are circling other UK banks. US outfit Cerberus is in takeover talks with the Co-operative Bank. 

British lenders have come under pressure from record-low interest rates and mounting costs from potential debts because of the pandemic. 

TSB has tried to restructure in the past few years, closing branches to cut costs and launching a marketing campaign to lure new customers. Debbie Crosbie was appointed chief executive in May last year and has brought in a new management team to revive the bank. 

TSB increased lending by £200million to £31.3billion in the first half of the year. Customer deposits rose £2.7 billion to £32.9billion. But the bank swung to a first-half loss of £65.5million after setting aside money to cover loans that may turn sour.

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