Thursday, July 25, 2024

Sabadell Entrusts Goldman Sachs With The Search For A Buyer

Sabadell entrusts Goldman Sachs with the search for a buyer for the British TSB

Spanish bank Sabadell (MC: SABE ) has given Goldman Sachs (NYSE: GS ) a mandate to sell TSB, its deficit UK business, two sources told Reuters on Friday with knowledge of the situation.

One of the sources said that the process was already underway and that the US investment bank, which had already been hired by Sabadell in July to explore various strategic options, is now in charge of the sale of TSB, acquired by the Spanish bank. in 2015.

The news comes after Sabadell and its rival BBVA (MC: BBVA ) announced on Friday that they were canceling their merger negotiations.

Sabadell said in its statement without going into detail that it will now analyze “strategic alternatives” for its international assets, including TSB.

Both Sabadell and Goldman Sachs declined to comment.

The first source did not provide further details or the planned divestment schedule for TSB.

A second source familiar with the situation said that, apart from a direct divestment, there were “more options” on the table, including a possible segregation of this business.

“Selling TSB will be complicated, as Sabadell could be perceived as a forced seller, and now Sabadell seems too small to compete in the retail sector with the main banks in Spain,” said Spanish investment firm Alantra after breaking up negotiations with the BBVA.

Like other Spanish banks, Sabadell ventured abroad to improve and diversify its income, but the TSB purchase was marred from the outset by the British bank’s significant technological problems.

Before entering formal merger negotiations with BBVA in November, Sabadell was working on an efficiency plan both in Spain, with the reduction of 1,800 jobs, and in TSB.

Sabadell expects TSB to reach profitability threshold in 2021 after losing 84 million euros in the third quarter.

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