Absolutely, I have some more thoughts on this which I’ll post tomorrow, but I think this is it in a nutshell.
The viability of supermarket banks especially, and small banks in general, is now an open question. Market forces, the regulatory and economic environment and consumer preferences/demands are conspiring to make it extremely difficult for independent small banks. So it wouldn’t be surprising to see consolidation in the sector.
My feeling is that TSB may eventually be absorbed into Virgin Money, if the time that Sabadell starts getting serious about a sale matches up with when Virgin have completed the Clydesdale integration.
Of the other branch-based banks, Metro bank seems vulnerable but it’s smaller size means it could potentially get absorbed fairly easily by a group like Lloyds; clearly they would quickly shut many of the existing branches.
I suspect the others may be quietly wound down, like Intelligent Finance, or potentially sold for a banking license as we’ve discussed in the case of Tandem. The other option is to pick off parts of the portfolio of products and sell them separately - credit cards to a provider like Jaja or NewDay, loans and mortgages to existing large banks, and so on.