Coventry’s £750m takeover of Co-op Bank confirmed

  • Coventry agreed to acquire the Co-op Bank last month in a £780m deal
  • The takeover would return the Co-op Bank to a mutual ownership structure

Coventry Building Society said it does not require members to vote on approving its takeover of Co-operative Bank, which the pair fully confirmed on Friday.

The West Midlands group agreed to buy the Co-op Bank last month in a £780million deal to create Britain’s seventh-largest lender, with millions of customers and around £89billion of assets.

It would also return the Co-op Bank to a mutual ownership structure about a decade after the Manchester-based firm was rescued by American hedge funds when it fell into financial difficulty.

Acquisition: Coventry Building Society agreed to buy the Co-operative Bank last month in a £780million deal to create Britain’s seventh-largest lender

Consent from the Prudential Regulation Authority and Financial Conduct Authority is required to accept the acquisition.

However, following assessments and professional advice, Coventry’s bosses have ‘conclusively determined’ that a member vote is not necessary.

‘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 business said.

Fellow building society Nationwide refused to allow members a say on its planned £2.9billion takeover of Virgin Money despite significant public pressure.

It claimed the massive size of its membership base – 17.9 million – made it impossible to conduct a vote within a short time period and was not legally needed under the 1986 Building Societies Act.

Virgin Money’s shareholders voted overwhelmingly earlier this week to approve the deal, which is set to be finalised during the fourth quarter of 2024.

Subject to regulatory approval, Coventry plans to acquire the Co-op Bank in the first three months of next year.

It said the takeover would provide it exposure to the personal current account and business banking markets, and bolster investment towards improving service in branches, online, telephone, and mobile services.

David Thorburn, chairman of Coventry Building Society, said the deal would be ‘a transformational moment for members and customers’ of both companies.

He added: ‘We’re building on our shared heritage and creating a stronger mutual business that will deliver in the best interests of our current and future members.’

Nick Slape, chief executive of the Co-op Bank, said the company has ‘successfully transformed and simplified the bank into one that is now sustainably profitable with a strong capital and liquidity position.

‘This transaction is a natural next step and presents an exciting opportunity.’