TSB has moved into foreign ownership after accepting a £1.7 billion takeover bid from Spain's Banco de Sabadell - nine months after being floated on the stock market.
The bank, which has 185 of its 631 branches in Scotland, has backed a cash offer of 340p per share from Sabadell.
Coming eight days after Sabadell's initial approach to TSB, it marks a 31 per cent premium on the 260p price at which shares in TSB debuted on the market in June.
Lloyds Banking Group, owner of Bank of Scotland, has agreed to sell its remaining 50 per cent stake in TSB to Sabadell. The deal comes in the same week the UK Government said signalled plans to sell off £9bn of Lloyds shares this year. That would its stake in Lloyds from 23 per cent to about seven per cent.
Sabadell, now Spain's fifth largest bank, announced a £1.2bn rights issue to short up its balance sheet after buying the British bank.
The bank, which has doubled in size in the last five years, bought Lloyds Spanish business in 2013. It said there is room to grow in the UK challenger bank space, vowing to step up TSB's presence in the UK small business sector and in current accounts.
TSB chief executive Paul Pester and chief finance officer Darren Pope will remain in their current roled, with Mr Pester joining the management executive committee of Sabadell.
Lloyds floated TSB on the stock market in June following the collapsed sale of 632 branches to the Co-operative Group for £750m. Lloyds had been looking to sell the branches under Project Verde to satisfy the European competition authorities.
TSB has about 4.6m customers and 8,000 members of staff. Shares in TSB closed up 7p at 334p.
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