UPDATE 1-Sabadell says is open to mergers, does not rule out sale of TSB

(Adds quotes from Sabadell’s CEO, CFO and context)

MADRID, Oct 30 (Reuters) - Spain’s Banco Sabadell is open to consider entering into a consolidation process if a potential transaction creates value for shareholders, while not ruling out a potential sale of its British arm TSB, its top executives said on Friday.

Banks across Europe are struggling to cope with record low interest rates, and the economic downturn sparked by the coronavirus pandemic is forcing them to focus on further cost cuts, on standalone basis or through tie-ups.

“We have always said we are definitely open to whatever option creates more value for our shareholders”, chief executive officer Jaime Guardiola told a conference call with analysts.

Last month, sources told Reuters that Sabadell had held informal talks about a possible tie-up, including with BBVA , whose CEO Onur Genç said separately on Friday the bank’s main focus was organic growth but that if there was “value to be created through M&A, we will do it”.

Sabadell’s chief financial officer, Tomas Varela, said also the bank did not rule out selling its British arm TSB while working on a separate restructuring plan there, to be completed in 2021, one year ahead of schedule.

The bank is now expecting TSB to break even in 2021 after booking a loss of 84 million euros in the third quarter.

“We won’t disclose our thoughts on whether to sell or not TSB. As we always have said, we always take into account the best option in terms of value,” Varela told analysts.

In parallel, Sabadell is also focusing on an efficiency plan both in Spain and in Britain.

Though the bank did not spell out how many employees would be affected by a cost-cutting plan in Spain, a source with knowledge of the matter told Reuters on Wednesday that the lender could cut up to 2,000 jobs in 2021. (Reporting by Jesús Aguado and Emma Pinedo; editing by Andrei Khalip)