Extraordinary General Meeting Convenes as Banco de Sabadell Proposes £2.65bn Deal

Banco de Sabadell shareholders are set to convene at an extraordinary general meeting (EGM) today to vote on the proposed sale of its UK retail banking arm, TSB, to Santander for £2.65 billion. The deal, announced last month, marks a strategic move by Sabadell’s board to streamline operations and strengthen its balance sheet amid ongoing market pressures.

TSB, acquired by Sabadell in 2015 for £1.7 billion, operates over 500 branches across the United Kingdom and serves more than five million customers. While the subsidiary once promised significant growth potential outside Spain, operational challenges and digital investment needs have weighed on profitability.

Banco de Sabadell’s Chairman, Josep Oliu, addressed shareholders in a pre-meeting statement, emphasizing the need to refocus on core Spanish and Iberian markets. “This transaction allows us to reallocate capital toward high-growth opportunities at home and maintain a robust liquidity position,” he said. “Santander’s scale and UK footprint make it the ideal steward for TSB’s future.”

Analysts note that the divestiture could improve Sabadell’s capital adequacy ratio by up to 150 basis points, providing a buffer against rising interest rates and regulatory demands. However, they caution that the bank will forfeit future revenue streams from a major European market.

Santander’s CEO, Ana Botín, welcomed the prospective acquisition, highlighting synergies with the bank’s existing UK operations. “Integrating TSB’s customer base will expedite our UK growth strategy and allow us to leverage advanced digital platforms,” Botín stated. The combined entity would rank among the top five retail banks in the UK by market share.

The proposed sale price of £2.65 billion represents a modest premium over TSB’s market valuation but comes with conditions, including regulatory approval by the UK’s Financial Conduct Authority and the European Central Bank. If approved, the transaction is expected to close by year-end.

Shareholder sentiment ahead of the vote appears mixed. Institutional investors, holding nearly 60% of Sabadell’s free float, have publicly voiced support for the deal’s financial merits. In contrast, some activist funds argue that Sabadell could command a higher price by exploring alternative bidders or retaining TSB to capitalize on long-term digital banking trends.

Voting results will be announced later today. Should shareholders approve the transaction, Sabadell will embark on an integration planning phase with Santander, while the remainder of the proceeds will be earmarked for debt reduction and technology investments in Spain.

As Sabadell navigates this pivotal moment, the outcome of the EGM will signal whether the bank’s shareholders endorse a decisive shift in strategy or opt to retain a foothold in the competitive UK banking sector.