Co-op and Britannia to get into bed

Britannia Building Society has entered into talks with the Co-operative Bank with a view to a merger.

As the global banking crisis puts pressures on lenders, the Co-op and Britannia have announced they are in early talks on working together – including a possible merger.

Any merger is currently not legally possible due to their different statuses, although they are both member-owned.

However, a merger would be possible if the Building Societies (Funding) & Mutual Societies (Transfers) Bill - known as the Butterfill bill – is passed – due to be completed by the end of the year.

A joint firm would have £70 billion of assets and six million customers.

Britannia chief executive Neville Richardson said: "As two like-minded, forward-thinking and financially strong mutuals, we're talking with CFS about how we can work together to create an exciting proposition for our members.

"Both businesses have been pursuing successful strategies and don't need to merge, but we recognise we could be even more successful by coming together and creating the UK's most trusted financial services business."

A spokesperson added: "The combined and complementary strengths of the two businesses could offer customers a real ethical, customer-owned alternative to the plc market."