- Co-op Bank considers Coventry merger
- Strategic review amid acquisition speculations
- Mutual status pride emphasized
The Co-operative Bank is considering a merger with Coventry Building Society following a strategic review initiated in November.
The lender, subject to undisclosed proposals, announced today exclusive discussions with Coventry Building Society to “evaluate the merits of a combination.”
Last month, Co-op initiated a strategic review, speculated to involve acquisition by Shawbrook, Aldermore, Paragon Banking Group, and other specialized lenders.
The under-consideration merger wouldn’t demutualize or cease Coventry Building Society as a building society, as confirmed by a representative expressing pride in mutual status.
Co-Op CEO Nick Slape predicted potential smaller bank mergers in March, hinting at his company being a target, especially amid rising interest rates.
Co-op Bank’s profit surged to £132.6 million in 2022 due to elevated interest rates, marking a significant turnaround since its 2017 rescue by a U.S.-based hedge fund consortium.
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However, profitability declined in the nine months to September post-Sainsbury’s mortgage portfolio acquisition.
Following non-binding proposals, exclusive discussions with Coventry Building Society are confirmed, with a transaction’s completion not guaranteed.
Coventry Building Society, the UK’s second-largest mutual, confirmed entering an exclusivity agreement for a potential offer for The Co-operative Bank. The society emphasizes pursuing a transaction only if it serves present and future members’ best interests.
