TSB started with small Scottish back over 200 years ago and is set for £2.65bn Santander deal
TSB, the bank born from a revolutionary idea in a Dumfriesshire hamlet more than 200 years ago, is now set to be absorbed by Spanish-owned Santander in a £2.65 billion deal that could spell the end of one of Britain's oldest banking names.
The Edinburgh -based lender has been under the control of Spanish banking group Sabadell for the past decade. But with a new sale agreed, pending shareholder approval, the iconic TSB brand, with its roots dating back to 1810, could soon disappear from the UK high street entirely.
The Trustee Savings Bank was the vision of Reverend Henry Duncan, a Scottish minister who wanted to offer working people an alternative to the commercial banks of the day.
At the time, most banks required a £10 minimum deposit to open an account, an impossible sum for agricultural workers and domestic servants who earned around 10d (4p) per day and were often paid only quarterly.
Rev Duncan launched his so-called "penny bank" in the village of Ruthwell to help locals manage their money and earn interest, even on the smallest of savings.
Drawing on his experience from working in a Liverpool bank, he took those deposits and reinvested them in commercial banks, paying savers interest of around 4–5% while retaining a small margin.
The model proved so successful that within five years, similar banks were popping up across the UK. By 2002, the Trustee Savings Bank concept had inspired 109 savings banks in 92 countries.
Duncan's tiny operation, run just one hour a week from a cottage, was hailed as the world's first savings bank.
Though the original Ruthwell bank closed in 1875 due to its remote location, the site now houses the Savings Bank Museum, which reopened last summer after a five-year hiatus.
The cottage, once filled with parishioners clutching coins, now displays hundreds of piggy banks and Duncan's original desk.
Duncan himself died in 1846 aged 71 after suffering a stroke, but his legacy lived on. The TSB would go through several transformations over the centuries, merging with Lloyds Bank in 1995 to become Lloyds TSB, before being spun off again during the 2008 financial crisis.
The European Commission ordered the split as a condition of Lloyds' £20 billion government bailout. Sabadell later acquired TSB in 2015 for £1.7 billion.
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Now, the next chapter in TSB's long and storied history could bring its identity to an end. Santander has confirmed it 'intends to integrate TSB in the Santander UK group', though UK bosses have said it will be 'business as usual' for now.
TSB's head office, Henry Duncan House on George Street in Edinburgh, is a nod to its founder, but its future under the Santander banner remains unclear.
The bank currently operates 175 branches across the UK and employs 5,000 staff, while Santander runs 349 branches, a number that has steadily declined in recent years as customers move online.
Tuesday's announcement has sparked fresh concerns over job losses and branch closures, with Santander already earmarking at least £400 million in cost savings as part of the merger plan.
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