Santander has approached the owner of TSB about a possible deal to buy the UK banking group, according to new reports.
Banco Sabadell, the Spanish parent firm of TSB, said on Monday that it had received interest about an acquisition and that it would consider any potential bids.
It did not name the company that had expressed interest.
A report on Sky News on Wednesday said that rival Spanish banking giant Santander had contacted Sabadell about a possible takeover move, citing sources from the City.
Sabadell and Santander declined to comment on the speculation.
TSB has grown its earnings in recent months – reporting a £101 million pre-tax profit in the first quarter, nearly double what it made a year ago.
Its chief executive Marc Armengol said the group was making an “increasing contribution” to Sabadell and that it was “well-placed for future growth”.
It currently runs about 175 branches across the UK.
The potential sale comes as Sabadell seeks to rebuff a potential hostile takeover by Spanish banking group BBVA.
BBVA has launched an 11 billion euro (£9.4 billion) move to take control of Sabadell and plans to put this offer in front of shareholders in the coming months.
Hugo Cruz and Ban Maher, analysts for KBW Europe, wrote in a research note that it would “make sense for Sabadell to consider its options”, especially as it is the subject of a takeover approach itself.
They added that TSB has “limited synergies with the rest of the group”.
Sabadell is Spain’s fourth-largest banking group, and also has a bank in Mexico.
Reports in the Financial Times that TSB could be sold for between £1.7 billion and £2 billion might be “too low” for Sabadell, which bought the high street bank for £1.7 billion in 2015, the analysts said.
