Move could offer its business a significant strategic boost
NatWest Group Plc is viewed as the most probable buyer for Banco Sabadell SA’s UK subsidiary TSB Bank, due to the strategic boost it would offer to NatWest’s mortgage business, according to analysis from RBC Capital Markets.
“We think that NatWest is the most likely acquirer,” wrote RBC analyst Benjamin Toms in a recent research note, as reported on by Bloomberg. Toms estimated the potential deal could be valued at around £2.6 billion. He added that the transaction would not require NatWest to raise additional capital and could increase its earnings per share by roughly 8%.
Sabadell announced on Monday evening that it is actively weighing a sale of TSB, marking a new chapter in its ongoing bid to fend off a takeover from Spanish banking rival BBVA SA. The bank confirmed it has received multiple expressions of interest and intends to consider any formal offers.
According to Toms, acquiring TSB could expand NatWest’s lending portfolio by approximately 10%, enhance its mortgage market share by 2%, and grow its deposit base by 1.4%. “This transaction makes the most sense for NatWest,” he stated.
NatWest has shown a pattern of interest in targeted acquisitions, having previously purchased mortgage portfolios from competitors.
Earlier this year, the lender also expressed interest in Banco Santander SA’s UK arm, according to a report by the Financial Times. Meanwhile, broader activity in the banking sector continues, with Metro Bank Holdings Plc shares climbing recently following a Sky News report that Pollen Street Capital had approached the company regarding a potential acquisition.
Sabadell originally acquired TSB nearly 10 years ago for approximately £1.7 billion. The bank has been striving to maintain its independence amid BBVA’s efforts to take control. That bid is now nearing regulatory approval, potentially allowing BBVA to present the offer directly to Sabadell’s shareholders in the near future.
