Major bank being sold to rival - with 2.6 million customers affected

Coventry Building Society has agreed a potential takeover of rival high street lender The Co-operative Bank for up to £780 million, the companies have announced. Co-op Bank currently has around 2.6 million retail customers and Coventry has around two million members.

If the deal is completed, it looks set to create a combined group with a balance sheet of around £89billion, making it a bigger player in the mortgage and savings market. The two groups have been in discussions over a possible merger for several months.

A deal would create a combined group with a balance sheet of £89 billion, making it a bigger player in the mortgages and savings market. Coventry said it would look to integrate Co-op Bank gradually over several years, with the bank's customers eventually becoming members of the building society.

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The lenders said they were working together to firm up the arrangements of the deal and stressed there can be no certainty that an acquisition will happen. The chief executive of Coventry Building Society, Steve Hughes, said it is an "exciting moment" for the group, adding: "The Co-operative Bank is a financially stable, profitable organisation with a shared heritage and products and services that complement our own.

"We're confident that we have the people, capability and the financial strength to bring both organisations together successfully over a number of years." Coventry Building Society CEO, Steve Hughes said: "We have a very successful history and we believe this could be the basis of a very successful future - with members, great value and a great service at its heart."

He went on: "Its customers, colleagues, branches, mortgage sand savings and additional products and services it provides will make us stronger and enable us to continue offering the value and service that matters to members and customers alike."