Rejected Co-op £1bn bid for TSB may herald more bank takeovers

CO-OP Bank today confirmed weekend reports that it put in a bid for rival TSB, opening up the prospect of other deals in the sector.

While that offer to TSB’s Spanish owner Sabadell was rejected, others now seem possible.

With the big banks again making big profits, but cutting branches, reasons for the second-tier lenders to unite seem to be growing, say analysts.

Low interest rates have hit margins and a new breed of app-based banking has taken away at least some custom.

Sabadell said “this is not a transaction that we wish to explore at this moment”. The deal was put at £1 billion.

Nick Slape, chief executive of the Co-op bank, said: “Our unique brand, underpinned by co-operative values and ethics and the significant progress we have made in returning our bank to profitability is a testament to the hard work of our colleagues and the loyalty of our customers — which we continue to place at the heart of all our decisions.”