By Jonathan Davies

TSB has agreed to a £1.7bn takeover by Spanish bank Sabadell.

The deal comes less than a year after it rejoined the London Stock Exchange after being split from Lloyds Banking Group.

Sabadell will pay 340p per TSB share, 4% above its closing price on Thursday. It's also 29% above the value on 11 March when Sabadell first expressed interest.

As part of the deal, Lloyds will sell its remaining 50% stake to Sabadell.

The UK bank said Sabadell will continue to "operate TSB as a robust competitor in the UK banking market, building on the TSB brand name".

Sabadell is Spain's fifth largest bank and plans to diversify its portfolio to offset its slowing domestic market.