Co-operative Bank has agreed to promote itself to Coventry Building Society for £780million, in a deal that may create a £89billion mutually-owned banking, mortgages and financial savings group.

Coventry chief govt Steve Hughes mentioned that the deal would deliver collectively two complimentary organisations. Co-op Bank would give the mutual a foothold in private present accounts and enterprise banking, whereas increasing its presence in mortgages and financial savings.

Discussions over the phrases are nonetheless ongoing and if the deal goes by means of, Hughes mentioned that Co-op Bank can be built-in into the mutual over “several years” to make sure consequence for patrons. Additionally, £125million of the £780million promoting value might be deferred for 3 years, topic to Co-op Bank’s efficiency.

“We have a very successful history and we believe that this (deal) could be the basis of a very successful future,” Hughes mentioned. “The Co-op Bank is a financially stable, profitable organisation with a shared heritage and products and services that complement our own.”

The deal to accumulate Co-op Bank is the second takeover of a financial institution by a mutual in as many months. Last month, Nationwide struck a £2.9billion deal to purchase challenger financial institution Virgin Money. Nationwide’s takeover will lead to a £420million windfall for Virgin Group founder Sir Richard Branson.