Santander UK has completed the acquisition of TSB for an all-cash consideration of £2.65bn.

The takeover, which received regulatory approval from the Prudential Regulation Authority and the European Central Bank, represents the single largest investment in the UK banking sector for over 15 years.

Santander said the deal will contribute to a target increase in its UK return on tangible equity of 16% by 2028, and synergies of at least £400m.

Combined, the two banks serve nearly 28 million retail and business customers nationwide, and Santander UK said the deal would allow it to better support these customers with increased investment in innovative products, its digital offering and new branch formats across the UK.

“This is excellent news for UK banking with the acquisition representing the single largest investment in the sector for over 15 years", chief executive officer at Santander UK, Mahesh Aditya, stated. "Bringing TSB into the Santander group strengthens competitiveness in the market and is an important step in creating the best bank for customers."

He added: "As we enter the next phase, we remain focused on a seamless transition, and we look forward to welcoming TSB customers as we become one of the most substantial and competitive banks in the UK - a bank positioned for sustainable growth, long-term value, and genuine differentiation."

CEO at TSB, Nicola Bannister, said: "Today marks a significant new chapter for TSB as we become part of Santander. I look forward to leading TSB as we combine the very best of these two great businesses to offer even better banking for our customers."

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