Staffordshire-based Britannia Building Society and Co-operative Financial Services open for business today as the country’s first “super-mutual”.
The unique merger has established what the two institutions say is an “ethical” alternative to shareholder and Government-owned banks.
More than 450,000 Britannia members voted by a majority of 88.6 per cent at the society’s annual general meeting in Birmingham in April to support the merger. The move has now been approved by the Financial Services Authority and the combined business came into being on August 1.
The first-ever merger between different types of member-owned businesses combines the personal and corporate banking and insurance businesses of Manchester-based Co-operative Financial Services with Britannia’s high street savings and mortgages expertise.
The effect of combining CFS with the UK’s second-biggest building society has created a new institution that will have £70 billion of assets, nine million customers, 12,000 employees, more than 300 branches and 20 corporate banking centres.
The business, a wholly-owned subsidiary of the Co-operative Group, is led by Britannia group chief executive Neville Richardson with Bob Burlton, the current CFS non-executive chairman, chairing the new board.
The Co-operative Group is one of the world’s largest and most successful consumer co-operatives with core interests in financial services, food, travel, pharmacy and funeral care. Britannia members are now members and co-owners of the group. Mr Richardson reassured Britannia members: “We’ll remain mututal, we’ll maintain an extensive branch netwrok and we’ll continue to share profits with members while offering them enhanced products and services.
“The combined and complementary strengths of our businesses will offer customers a strong, fair and ethical alternative to banking plcs.
“Customers will be owners and will have available all the services they would expect from a major financial provider, together with a real say in setting strategy and a share of the profits.”
Mr Burlton said: “The move will accelerate the momentum within the Co-operative and mutual sector. Both businesses have been pursuing successful strategies independently and are strong in their own right but we recognise we could be even more successful by coming together to create the UK’s most trusted financial services businesses.
“The co-op and mutual movements have never been more relevant. People are crying out for a new way of doing business with a financial company that truly has their interests at heart.”
The merged business will continue to have a significant presence in Leek and Manchester. Overlapping Britannia and CFS branches will be merged but compulsory redundancies have been ruled out. The combined business will expect to deliver more than £60 million a year in efficiency and revenue benefits.
In its notice approving the transfer of the Britannia’s business to CFS, the FSA said it had it had taken evidence from 20 objectors but had found nothing that had materially affected the decision of the society’s members to support the merger.