Sabadell is under no pressure to sell its British TSB business, the Spanish bank’s chief executive Cesar Gonzalez Bueno said on Tuesday, despite recent UK sector consolidation.
Nationwide Building Society agreed in March to buy Virgin Money UK in a potential 2.9 billion pound ($3.7 billion) all-cash deal to create Britain’s second-largest savings and mortgage provider.
The Nationwide’s move, coupled with the acquisition of Tesco Bank by Barclays in February, fuelled market speculation that Britain’s biggest banks might pounce on smaller lenders as competition to lend grows.
“The commitment to TSB is indefinite, so we have nothing on the horizon,” Gonzalez Bueno said, adding that the market sentiment towards banks in Britain had turned more positive.
“Virgin Money was valued at 0.6 times its book (value) by Nationwide and though we don’t think it is highly valued, at least it has put a floor on the valuation of TSB and we have seen a noticeable reduction in questions about TSB in the investment community,” Bueno said.
Sabadell Chairman Josep Oliu said TSB remained a valuable asset for Sabadell.
“TSB has the potential to continue growing its profits over the coming two or three years and there are no other plans regarding TSB,” Oliu told reporters ahead of the bank’s annual shareholders meeting in Alicante.
Sabadell, has put previous plans to sell TSB on hold until it turns around the British bank, which reported a 71% annual rise in net profit in 2023 to 175 million pounds.
The Spanish bank’s 1.7 billion pound acquisition of TSB in 2015 ran into difficulties six years ago when IT glitches sent costs spiralling.
Source: Reuters.com