Virgin Money is negotiating the takeover of Norwich & Peterborough building society (N&P), The Sunday Times has reported.
Such a move is likely to relate to the problems faced by N&P over its sale of Keydata bonds.
Keydata went bust in June 2009 and some N&P members have since claimed that they were unaware of the risks involved in the investment, and the level of commission charged by the building society.
Late last year, Kent Reliance Building Society struck a deal with JC Flowers under which the private equity firm injected £50 million in cash into the Society, which has since transferred all its assets and liabilities to OneSavings Plc, a new business operating as a bank.
Members of the Society have become members of Kent Reliance Provident Society, a new industrial and provident society that owns 59.9% of OneSavings Plc, with JC Flowers holding the remaining equity.
The deal was the first of its kind in the UK mutual sector, parts of which have been struggling to raise capital since the onset of the financial crisis.