Coventry Building Society to acquire Co-operative Bank

Coventry Building Society has agreed to acquire Manchester-based Co-operative Bank in a £780 million deal.

West Midlands-based Coventry Building Society is the UK’s second largest mutual and the takeover of Co-operative Bank would make the combined group the country’s seventh largest lender with assets of £89 billion.

Under the deal, which has been agreed without a vote from Coventry Building Society members, the Co-operative Bank’s 3 million customers, along with its colleagues and branch network of 50 sites would be integrated with the West Midlands mutual over several years should the deal gain the necessary regulatory approval.

The Co-operative Bank is headquartered in Manchester city centre and previously a major Stockport employer based at the Stockport Pyramid until a 2018 restructure of the business, having financed the landmark’s construction. The bank was part of the wider Co-Op Group until 2017 when, as a result of financial difficulties at the bank, it was bailed out by American hedge funds and is now under owned by private equity investors.

Chief Executive Officer of Coventry Building Society, Steve Hughes said in the joint statement:

“This is an exciting moment for the Society. We have a very successful history, and we believe this could be the basis of a very successful future – with membership, great value and great service at its heart.

‘The Co-operative Bank is a financially stable, profitable organisation with a shared heritage and products and services that complement our own.

“Its customers, colleagues, branches, mortgages and savings balances, and the additional products and services it provides, will make us stronger and enable us to continue offering the value and service that matters to members and customers alike. We’re confident that we have the people, capability and the financial strength to bring both organisations together successfully over a number of years.”

The Coventry Building Society is the second mutual to acquire a fellow UK bank in recent months. The UK’s largest building society, Nationwide, is currently awaiting regulatory approval for a £2.9 billion merger with Virgin Money.