Santander responds to fears of branch closures and lower savings rates with TSB takeover

Savings experts have voiced concerns that Santander taking over TSB could mean more bank branch closures and less competitive savings rates.

Santander is hoping to agree a deal to take over TSB, to become the third largest bank in the UK by share of personal current accounts.

Mike Regnier, chief executive of Santander UK, told BBC Radio 4 today (July 2) that he believes the group can make "efficiency savings" of around 13% on the combined costs of the Santander and TSB business once they have taken on the latter.

This has prompted concerns from critics that this could involve axing more branches while savings rates could also be affected with one less bank competing to offer the best rates.

Matthew Sanders, CEO & Founder of bank provider SuitsMe, said: "Today's news that TSB is set to disappear into Santander's empire isn't just about shareholders and balance sheets – it's about the steady erosion of choice and innovation in British banking.

"We're watching the UK banking landscape shrink before our eyes. First Abbey, then Bradford & Bingley, Alliance & Leicester, and now TSB, all absorbed into the Santander machine.

"Each acquisition means fewer voices at the table, fewer approaches to serving customers, and frankly, less pressure on the big players to actually innovate."

Kevin Mountford, personal finance expert and co-founder of Raisin UK, warned the move could mean savings rates become less competitive.

He said: "Each of these deals shrinks the pool of providers, and that has a knock-on effect for savers and everyday banking customers.

"Less competition can mean poorer rates, less innovation and reduced service, particularly for those who still rely on local branches."

Others have raised concerns about potential bank branch closures with the takeover. Jenny Ross, money editor at consumer advocacy group Which?, said: "This news could understandably be concerning for some TSB and Santander customers - particularly those who prefer to use a local branch for their banking.

"Which? research shows TSB has closed 459 branches and Santander has closed 493 branches since 2015 and this proposed deal could lead to further closures.

"If this deal goes ahead, the Financial Conduct Authority (FCA) must look closely at any planned bank branch closures to ensure that FCA rules and guidance are followed, and that there is no risk of customers, especially those with disabilities, losing access to local banking services or cash."

When asked about the potential for branch closures, Mr Regnier told the BBC: "On branches, customers are changing the way that they choose to bank.

"More and more people are turning first to their mobile rather than popping down the high street to see their bank. Banks are responding to that.

"All of us have been reducing and trimming the size of our branch networks and when we combine ourselves with TSB, we will end up with branches in the same town again. Obviously, there's no point in having two branches in the same town serving the same customers."

He said the deal will likely not be finalised until the first quarter of 2026. When presented with the concerns, Santander said that just having losts of banks does not necessarily mean genuine competition.

The group said they hope to be the best bank in the UK and that it was better for them to buy out TSB than for one of the big four banks to take them on, as this latter option would reduce consumer choice in key sectors.