British bank TSB has agreed to a €2.3 billion (£1.7bn sterling) takeover by Spanish lender Banco Sabadell in one of the biggest cross-border banking deals since the financial crisis.
Sabadell, Spain's fifth-biggest bank, said it planned to grow TSB, which was spun out of Lloyds Banking Group last year, into a significant challenger to Britain's top banking lenders.
Lloyds was ordered to sell TSB by European regulators as a condition of its £20bn bailout during the crisis. Lloyds said on Friday it had agreed to sell a 9.99pc stake to Sabadell and entered into an irrevocable undertaking to sell its remaining 40.01pc stake to the Spanish ban
Cross-border takeovers have been rare in the banking sector since the financial crisis, with bigger banks focusing on slimming down to bolster capital and meet tougher regulations.
Sabadell said that it would raise €1.6bn of new capital at €1.48 per share to help fund the deal.
TSB's Chief Executive Paul Pester and Finance Director Darren Pope will continue in their current roles, the banks said.