* Bank targets additional annual cost cuts of 100 mln eur in Spain

* Sabadell sees ROTE of more than 6% by 2023

* Sees loans growing annually more than 2% in three-year strategy

* Sees low single digit NII growth in strategic plan

* Expects British unit TSB to reach ROTE of over 6% by 2023

MADRID, May 28 (Reuters) - Spain's Sabadell said on Friday it expected additional cost savings and revenue growth from a push towards corporate and consumer lending in Spain to drive profitability as part of its new three-year strategic plan.

Banks across Europe are struggling to cope with record low interest rates, and the economic downturn sparked by the COVID-19 pandemic has forced them to focus on further cost cuts.

Sabadell said it expected additional annual cost savings of around 100 million euros ($122 million) in its home market, which it expected to have completed by the first quarter of 2022.

The lender said savings would include branch closures and staff expenses. A source with knowledge of the matter said the bank's plan would potentially include a new round of layoffs.

Sabadell declined to comment.

The bank has already generated around 141 million euros in annual cost savings following 1,817 staff cuts in 2020.

Spain's fourth-largest bank by assets said it aimed to increase its return on tangible equity (ROTE), a measure of profitability, to more than 6% by end 2023 from 1.25% currently.

Though the bank did not give a specific figure for 2023, analysts expect the ROTE target to translate into a net profit that year of between 625 million and 670 million euros, versus just 2 million euros in 2020.

Sabadell's failure to merge with BBVA last year added to pressure on the bank, as investors worried about its ability to handle an expected rise in bad loans on its own.

On Friday, Sabadell said it expected its 2021-2023 plan to benefit from an economic recovery in Spain and Britain, a tighter control of the pandemic and stimulus from European funds.

In this context, it aimed for its loan book to reach a compound annual growth rate (CAGR) of more than 2% over the period, which it said should also allow for low single-digit cumulative growth in net interest income (NII).

Shares in Sabadell were down 1% at 0.6680 euros by 0714 GMT after rising more than 90% so far this year.

Spanish broker Alantra said that NII growth forecasts looked overly optimistic and believed the bank was trying to buy time with this plan, with "the intention of trying to sell (British unit) TSB over time and/or resorting to M&A eventually".

The bank, which is in the midst of a technological transformation, said it expected to benefit from a shift to a fully digital approach in its consumer and payments business.

Sabadell said it expected TSB, which in the first quarter swung back to profit, to reach a ROTE of more than 6% by 2023, buoyed by growth in mortgages and continued cost reductions. TSB booked a loss of 220 million euros in 2020.

It said TSB was on track to deliver 100 million pounds in total cost savings by 2023.

Sabadell's acquisition of TSB in 2015 ran into issues when IT glitches sent costs spiralling in 2018. Though Sabadell had been planning to sell TSB, its new Chief Executive Cesar Gonzalez-Bueno has frozen the process for now.

($1 = 0.8202 euros) (Reporting by Jesús Aguado; additional reporting by Emma Pinedo; Editing by Inti Landauro, Robert Birsel and Jan Harvey)