Sabadell Planning TSB Sale?

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TubularWorld from Wikimedia Commons

Reportedly, Sabadell, a Spanish lender, is planning to merge or sell its TSB unit eventually once it has returned the bank to profitability.

Josep Oliu, the chairman of Sabadell, said the options for the British bank would be looked at in due course. The bank was negatively affected by a costly IT meltdown earlier in the year.

During an event that was held in New York, Expansion, a newspaper, quoted Oliu as saying: “The aim is that TSB enters into a process of consolidation in the future in Britain.”

He stated: “We will need at least two years for this. Afterwards, we will enter into the consolidation process.”

His remarks prompted speculation that the company could look to sell the business.

However, last Friday, a spokesperson for the Spanish group said that Spain’s Sabadell has no plans to sell its TSB unit. He said that it wants the bank to start acquiring other assets once it has cleared up the fallout from an IT meltdown.

The spokesperson said that TSB “is an essential part of Sabadell’s core plan… so an eventual sale is pointless.”

He continued: “Once we have got past the IT problems, our priority is to deploy more modern and efficient platforms in Britain, to be an important player in the small and medium-sized business market.”

Sabadell is set to present a plan in the new year to turn the bank around after the IT meltdown that the bank encountered this year, after which Paul Pester, the boss of the company, stepped down.

The IT issues began last April. It stopped the customers of TSB from logging into their accounts online for months. A botched system switch locked almost two million customers out of the online banking services of the company and resulted in an increase of fraudulent activities. The meltdown cost the company approximately 320 million euros (285.16 million pounds).