As the banks struggle on the UK high street the Britannia, Britain’s second largest building society, is in merger talks with Co-operative Financial Services.
As the banks struggle on the UK high street the Britannia, Britain’s second largest building society, is in merger talks with Co-operative Financial Services.
The proposed merger comes ahead of changes in the law designed to facilitate different types of mutual societies working together. The changes, enshrined in the Building Societies (Funding) & Mutual Societies (Transfers) Act, are due to come into force later this year.
The Britannia, which, according to the groups Interim Accounts released this summer controls assets of £38 billion, is keen to avoid the suggestion that the move represents a take-over of the Co-operative Financial Services. "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.” Says Britannia's Group Chief Executive Neville Richardson.
The Co-operative Financial Services(CFS), which also controls the Co-operative Bank and a string of other businesses, is the largest consumer co-operative in Britain. Managing assets broadly equal to that of the Britannia, CFS is confident that the merger will be beneficial to both parties. "CFS is in a strong financial position and we are moving forwards with our investment plan to significantly increase our market share in core markets over the next few years." Says: CFS’s Chief Executive, David Anderson
With the uncertainties surrounding the world banking system lingering the more trusted mutual societies are seizing the opportunity to solidify their position and fill the gap in the mortgage and savings market the high street banks are unable to fill.
"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," says Britannia's CEO Neville Richardson.
Should the merger be given the go ahead by Britannia’s members the new entity would share combined assets of around £70 billion and six million customers.
