Spanish lender Banco de Sabadell has received approval from the European Commission to buy Britain’s TSB Banking, a spin-off of Lloyds Banking, for £1.7bn.
The Commission said that that the proposed deal raised no competition issues as the banks command moderate combined market shares and have limited overlap on the markets concerned.
The commission in a statement said: "backing of a larger banking group like Sabadell will enhance TSB’s ability to compete as a challenger bank and stimulate competition in the British retail banking markets, to the benefit of U.K. consumers."
Last year, the EU competition watchdog asked Lloyds Banking to dispose TSB in return for allowing its £20bn bailout during the financial crisis. TSB has 631 branches and 4.6 million customers.