MOVES to create a "super- mutual" from the merger of the Co-op's financial services arm and the Britannia building society were revealed yesterday.
A tie-up would form a business with more than six million customers and £70 billion of assets, although both sides stressed that talks were at an early stage and were part of wider discussions about them working together.
Legislative changes
due to come into force by the end of this year will make it easier for different types of mutuals – building societies, co-operatives and friendly societies – to join forces.
Both organisations are in sound financial health and believe a tie-up could offer customers a customer-owned alternative to the plc market.
Staffordshire-based Britannia has a 245-strong branch network and 2.6 million savers.
CFS – which is part of the Co-Operative Group, the world's largest consumer Co-op – has a personal and business banking franchise as well as a life and general insurance operation.
Britannia chief executive Neville Richardson said: "As two like-minded, forward-thinking and financially-strong mutuals, we're talking with CFS about how we can work together to create an exciting proposition for our members.
"Both businesses have been pursuing successful strategies and don't need to merge, but we recognise we could be even more successful by coming together and creating the UK's most trusted financial services business."
It is not clear whether Britannia's three million members would receive a windfall payment as part of any merger with the Co-op.
Richardson said it was too early to comment about the impact such a move would have on customers and staff.
"We can say that we remain committed to our Leek, Staffordshire base, our extensive branch network and our strong Britannia brand," he added.
The Co-op will be hoping Britannia's branch network offers a platform for distributing its bank accounts and internet banking arm, Smile.
As well as speaking to the Britannia, the Co-op said it had been in contact with other parties about how its products can be sold in their branch networks.
The Co-op said: "We have ambitious growth plans and have had discussions with a number of parties, including Britannia, about how we can work more closely together for mutual benefit."
