Coventry and Stroud & Swindon in merger talks

by Gill Montia

Story link: Coventry and Stroud & Swindon in merger talks

Coventry Building Society is reported to be in merger talks with Stroud & Swindon.

Coventry is the UK’s third-largest society with a 48-strong branch network and over one million members.

Stroud & Swindon ranks 10th having 22 branches across the South West, and a Gloucestershire-based customer contact centre.

A tie-up between the two could create a society with around 1.2 million members and assets well in excess of £20 billion.

In 2009, Coventry posted pre-tax profit of £56.2 million, compared with £26.4 million in 2008.

The outstanding result was accompanied by a core tier 1 ratio of 27.9%, which the lender claims to be the highest reported by any large society.

Stroud & Swindon’s 2009 results are awaited but the society made a loss in 2008, blaming the deficit on a rise in the levy charged by the Financial Services Compensation Scheme.

Last month, it appointed a new chief executive – John Sutherland took up the post after 20 years with Nationwide.

The UK’s building societies claim they are unfairly disadvantaged in today’s regulatory environment which demands lenders hold higher levels of capital, because they are limited in the ways in which they can raise funds.

This and competition pressures have led to a spate of mergers in the sector in the past year.