Major high street bank faces 'substantial' branch closures after Santander's £2.65bn takeover deal

Santander UK's £2.65billion takeover of TSB is expected to receive regulatory approval in early 2026, sparking warnings of widespread job losses and branch closures across the UK.

The Spanish-owned lender’s chief executive, Mike Regnier, has confirmed he will step down by the end of March 2026, after announcing his departure once the deal was completed.

Mr Regnier has accepted that the merger will lead to redundancies and site closures, with the TSB brand likely to disappear entirely from Britain’s high streets.

The job of bringing the two banks together will be left to his successor, who will take over the larger business and lead the next phase of changes, including cuts and restructuring.

Once combined, the new group will become Britain's third largest bank based on personal current account customers and the fourth biggest mortgage lender. Together, the bank will serve almost 28 million personal and business customers across the UK.

Industry experts are warning that the human cost of the merger will be significant. John Cronin, managing director of research firm SeaPoint Insights, said: "I expect the scale of the staff and branch cuts over the next couple of years will be substantial."

Mr Regnier himself has indicated that closures are unavoidable, stating there would be "no point having two branches in the same town serving the same customers."

When the deal was announced in July, TSB had 175 branches and around 5,000 staff. Santander UK, meanwhile, operated 349 branches and employed roughly 18,000 people nationwide.

The deal saw Santander's Madrid-based chief Ana Botin outmanoeuvre Barclays, which had also expressed interest in acquiring TSB from its Spanish owner Sabadell.

Santander has described the purchase as an opportunity to build "the best bank for customers in the UK," promising enhanced digital services alongside its physical branch presence.

The outgoing chief executive has suggested that savings will be drawn from multiple areas, including IT systems and back-office functions.

Santander's leadership anticipates trimming 13 per cent from the combined operating costs of both banks through the integration process, putting hundreds of locations potentially at risk.

The historic TSB name appears destined to vanish from the high street once the integration is complete, though the precise timeline remains unclear.

Two internal candidates have emerged as frontrunners to replace Regnier: group chief risk officer Mahesh Aditya and Enrique Alvarez Labiano, who currently leads Santander UK's retail and business banking division.

Whoever takes charge will inherit additional challenges beyond the merger itself, as Santander continues to grapple with fallout from a car finance mis-selling scandal that has affected multiple lenders.

The controversy prompted Santander to postpone its third-quarter UK results.

The bank has criticised an £11billion compensation scheme established by the Financial Conduct Authority to reimburse affected motorists.