Coventry Building Society and Co-op Bank £780m tie-up confirmed
The combined group will be led by David Thorburn as Chairman and Steve Hughes as Chief Executive Officer.
The £780m tie-up between Coventry Building Society and the Co-op Bank was confirmed this morning, creating a new major player in Britain’s high street banking market.
The deal will return the Co-op Bank to mutual ownership and create a lender with a balance sheet of £89bn, making it the UK’s seventh largest player in the retail banking space.
Coventry Building Society said it will gain an “established position” in the current account market and broaden its distribution channels, including through a much-enlarged branch network.
“A combination between the society and the bank is expected to both deepen the enlarged group’s existing presence in mortgages and savings and extend the society’s propositions,” the pair said in a joint statement.
Integration of the Co-op Bank will take place “gradually over several years”, with the two brands remaining separate while further work to integrate services is carried out.
The combined group will be led by David Thorburn and Steve Hughes, Coventry’s current chair and chief executive.
The deal will not be subject to a member vote. Coventry said it had “considered carefully” whether it needed to put the takeover deal to a vote but has “conclusively determined that a member vote is not required”.
“In coming to this decision, the CBS Board has been informed by member surveys and focus groups which clearly signalled their priorities as maintaining our value proposition and service quality,” the lender said.
Hughes said: “By bringing together Coventry Building Society and The Co-operative Bank we will be able to deliver more value to more people in the coming years.”
After being rescued by US hedge funds back in 2017, the Co-op Bank has been through a long process of recovery, returning to profit in 2021. It has long been seen as a takeover target for banks looking to challenge the dominance of the UK’s established lenders.
Bob Dench, chair of the Co-op Bank, said: “This transaction sees The Co-operative Bank returning to mutuality. I am very proud of all those who have worked so hard over so many years to rebuild the Bank.
“I am sure the Coventry Building Society will prove to be a very good home for us,” he added.
