Britannia and Co-op to merge

by Gill Montia

Story link: Britannia and Co-op to merge

The Britannia Building Society is pushing ahead with plans to merge with Co-operative Financial Services (CFS) which operates the Co-op’s insurance and banking arms, including Internet bank, Smile.

The mutuals first discussed the idea in October of last year but cannot complete a merger until the passing of the Butterfill Bill which will remove legislation that currently prohibits mergers between mutuals and co-operatives. The Bill goes before parliament in March.

The proposal could create one of the largest financial services groups in the UK, with over nine million customers, 12,000 employees, 300 branches and 20 corporate banking centres.

It is understood that Britannia members will switch to become Co-operative members although the Britannia brand will remain until integration is complete.

Members of the UK’s second-largest building society will not, however, be receiving windfall payments.

According to Britannia and CFS, the move will provide customers with a strong, fair and ethical alternative to banking plcs.

As the customers of mutuals are also their owners, they will both have a say in how the organisation is run and a share of the profits.

Branch closures are expected but at this stage both parties are promising that there will be no compulsory redundancies.