Britannia Building Society and Co-operative Financial Services are planning to merge with the intention of becoming a 'super-mutual', offering an ethical alternative to shareholder-owned banks.
The combined businesses will be "the most diversified customer-owned business in UK financial services", the Co-op has said in a statement, "strongly capitalised and with scale and strength in product, distribution and service".
The two firms believe that they have a 'cultural fit', combining the Co-operative's
expertise in personal and corporate banking, insurance
, with Britannia Building Society's
penchant for strong savings accounts
products, as well as a prominent presence on the high street as the UK's second biggest building society.
The merger will create a business with £70billion of assets, nine million customers, 12,000 employees and more than 300 braches; customers will continue to share the profits generated by the two businesses and have a say in how they are run.
Current Britannia group chief executive Neville Richardson will lead the new business, which will be a wholly owned subsidiary of The Co-operative Group, while Bob Burlton, the current non-executive director of CFS, will chair the new board. David Anderson, the chief executive of Co-operative Financial Services, will leave the business after the integration process is complete.
"The combined and complementary strengths of our businesses will offer customers a strong, fair and ethical, alternative to banking
plcs." said Britannia chairman Rodney Baker-Bates of the merger. "Customers will be owners and will have available all the services they would expect from a major financial provider, together with a real say in setting strategy combined with a share of the profits."
CFS chairman Bob Burlton added: "This move will accelerate the momentum within the co-operative and mutual sector. Both businesses have been pursuing successful strategies independently and are strong in their own right but we recognise we could be even more successful by coming together to create the UK's most trusted financial services business."
The merger is dependent on the agreement of Britannia's members when they vote at a general meeting, expected to take place in April.
© Fair Investment