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October 12, 2008

Britannia and Co-op snuggle up

by Gill Montia

Story link: Britannia and Co-op snuggle up

Britannia, the UK’s second-largest building society, is reported to be in merger talks with Co-operative Financial Services (CFS), which operates the group’s insurance and banking arms, including Internet bank, Smile.

Both the Times and Telegraph have reported that the parties could create a “super-mutual” that would be one of the largest financial services groups in the UK, holding around £75 billion in assets.

Both mutuals currently have around three million members and between them employ approximately 13,000 staff.

However, such a move is dependent upon parliamentary support for a bill sponsored by Conservative MP, Sir John Butterfill.

The Butterfill Bill, which will go before parliament early in the New Year, proposes the removal of legislation that currently prohibits mergers between mutuals and co-operatives.

The Bill received a second reading in the House of Commons in March of last year and has had a successful second reading in the House of Lords.

In the meantime, Britannia and Co-op may draw up an agreement whereby the building society would promote the latter’s financial services.

The talks indicate that consolidation in the UK’s mutual sector is likely to continue, following the Nationwide’s takeover of the Cheshire and Derbyshire building societies, announced early last month.

 

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