UBS and Bank of America Merrill Lynch have emerged as financial advisers to Lloyds on the £1.7 billion sale of UK challenger bank TSB to Spain’s Sabadell.

The banks announced on Friday that all sides had agreed to the terms of the 340 pence a share takeover of TSB, having confirmed last week that they were in talks over a possible deal. Sabadell has agreed to acquire a 9.99% stake in TSB from Lloyds on March 24, and Lloyds has entered into an "irrevocable undertaking" to accept the offer for its remaining 40.01% shareholding in TSB at a later date.