A European Commission ruling that the British government's 2009 purchase of a 43% stake in Lloyds Banking Group counted as state aid made it necessary for Lloyds Banking Group to sell a portion of its business; TSB was divested.

[12] Codenamed "Verde", the group's divestment plan identified 632 branches which were transferred to a new business.

In February 2013, it was reported that Lloyds Banking Group was considering a stock market flotation of the TSB business as an alternative, should the transfer not be completed, and they would make a final decision by the end of July.

[16][17] In April 2013, The Co-operative Group announced that it would not proceed with the transaction, citing the economic environment and increasing regulatory requirements in the financial sector.

[23] According to Lloyds' chief executive, António Horta-Osório, the separation cost £1 billion more to perform than the new bank is worth.

[24] On 12 March 2015, TSB confirmed a takeover bid by Sabadell for £1.7 billion, less than a year after it rejoined the stock market through Lloyds Banking Group's sale of 50% of its holding.

[5] After the acquisition, a new board of directors was formed, including Tomás Varela and Miguel Montes Güell.

[32] Two weeks after commencement of the migration, failures were still being reported with services such as the online banking application giving internal SQL database-related errors.

Payment difficulties, particularly with business and mortgage accounts continued into a fourth week[33] and it was revealed that TSB had rejected an offer of assistance from Lloyds Banking Group at the start of the migration crisis.

[33] There were further problems affecting login to online services, and the ability to transfer money on 3 September.

[41] In 2023, the Prudential Regulation Authority personally fined Carlos Abarca £81,000 for his part in the debacle.

TSB's launch advertising campaign featured a short film about the bank's founder Henry Duncan and was voiced by Patrick Stewart.

It is served by a standalone website and separate contact centre, with TSB branch staff have no access to Whistletree accounts.

[49] The division's name refers to the blue tree branding used by TSB Bank and the whistling that features in its television advertising.